The terms Merchant Account and Merchant Service Agreement are used to describe the agreement with your acquiring bank that defines how you (the merchant) can accept credit and debit card payments from your customers (the cardholders). These card payments maybe accepted from a number of different payment channels such as retail (bricks and mortar),  mail/telephone order and e-commerce. The Merchant Service Agreement will outline the card types that can be accepted, the currencies that can be accepted and the payment channels over which they can be accepted.

A merchant account is required for each of these different payment channels. In the case of ecommerce transactions i.e. online payments, an Internet Merchant Account is required. An Internet Merchant Account is different than that of a traditional Merchant Account used for retail and mail/telephone payment channels. With a Merchant Account some of the transactions may take place when the customer is not present at the point of sale - examples of these would be mail or telephone orders. The acquiring bank makes a distinction between Customer Present (CP) and Customer Not Present (CNP) transactions due to the extra level of risk associated with CNP transactions. In the case of an Internet Merchant Account the customer will never be present so there is an extra risk with this type of transaction

Introduction << Index >> How do I get an Internet Merchant Account?