Merchant Account Guide

Merchant Services

Merchant is anyone who is involved in the business that enables to be processed using the desired payment method i.e. by debit or credit card from a POS machine?

Merchant processing activities involve obtaining sales information from the cardholder, receiving authorization for the transaction, collecting funds from the bank which issued the credit card and sending payment to the merchant.

Selection Criteria on boarding New Merchants

Successful Merchant on boarding is a key to the bank’s growth.  It is the process of adding the new merchant on to our platform or payment gateway system. Of course, we want more merchants, bringing in more transactions. However, on boarding questionable merchants that authorizes fraudulent transactions result in charges and losses that impact the bottom line. Nowadays it’s clear why it is critical to focus on On-boarding process as the key to growing as a more efficient and productive business.

How Does a Merchant Work?

A merchant works with the bank to apply for and receive a merchant account (an account that allows the merchant to accept credit and debit cards). Whenever a customer purchases an item with a credit or debit card, the merchant submits the purchase transaction information to its acquiring bank, which will then submit it through the card association network to the card holder’s issuing bank. The issuing bank will approve or decline the charge, and bill the cardholder the amount due to the merchant.

Steps when we processed the Transaction

Step 1: Merchant initiates a transaction by swiping or inserting their credit/debit card at a merchant’s point-of-sale (POS) system.
Step 2: Transaction info (amount, card number, PIN etc.) is sent from their MSP.
Step 3: Merchant’s MSP sends transaction info to the appropriate card association (Visa, MasterCard, CUP, AMEX etc.)
Step 4: Card association sends transaction information to the cardholder’s bank.
Step 5: Cardholder’s bank checks their available funds/credit limit and approves transaction accordingly. Payment approval is sent back to card association.
Step 6: Card association confirms approval of transaction with the merchant’s MSP.