A merchant account is a relationship with a credit card processing
bank, that allows a merchant to accept and process credit cards.
Merchant accounts can be set up in the name of an individual or by a
corporation. Each location of a business with a single ownership
must have its own merchant account. And each website set up by a
merchant that either, has a different name or sells different
products needs to have its own merchant account.
The
ISO(Independent Service Operator) or MSP(Merchant Service Provider)
is a bridge between the processing bank and the merchant. Think of a
merchant account as a type of pain reliever, where the processing
bank is (Advil, or Tylenol) and the MSP is the drug store, like
Walgreens, or Eckerd. You can get a variety of pain relievers, each
with its ups and downs just like processing banks. There are several
different processing banks, and some are definitely better than
others, not just in fee's but in customer service, and the way the
processing bank handles any problems that may occur with a merchant
account. Most drug stores have similar prices and service, but some
offer lower prices and rebates as incentives to their customers. The
same situation is true with merchant account providers. The reason
that there are ISO's is that they have many clients, in our case
thousands of clients. They are basically able to buy a lower
processing rate in bulk and offer it to their clients. If you were
to go straight to the processing bank to process, you would see a
much higher rate that you would be quoted from an ISO. Some smaller
ISO's that do not have a large number of clients are unable to get
the lower rates from the processing bank because they do not have
the volume of processing that the larger ISO's have.
