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What is a merchant account and how do I get one?

Updated Oct 31st, 2017 at 12:24 GMT

A merchant account is a type of bank account that allows businesses to accept payments by payment cards, typically debit or credit cards. A merchant account is established under an agreement between an acceptor and a merchant acquiring bank for the settlement of payment card transactions. 

How it works:

  1. Your customer inputs credit card information in your online shop;
  2. The Payment Gateway encrypts data and send it securely to your Internet Merchant Account;
  3. The transaction is reviewed for authorisation by the customer's issuing bank;
  4. The result is encrypted and sent back through the gateway;
  5. You get the results and decide whether or not to fulfil the order.

Depending on how much time you are prepared to wait and the quality of your business plan, there are two ways to obtain a Merchant Account:

  • Directly through your bank or any other hight street bank;
  • As part of a compete online payments solution via an independent PSP which can issue you with an Internet Merchant Account on behalf of a preferred banking partner.

In either way, your business will be reviewed and the potential risk in your business plan will be evaluated before you are approved for a Merchant Account.