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What is a merchant account? How do I get ready for online payment processing?

If you are new to the web, your learning curve is straight up. Just remember, you're not alone. Many are trying to grasp just what a merchant account is and how it fits into the web or your new web site.

A merchant account is just an account established with a banker, merchant service provider that allows you to manually accept credit cards and process them, with the final destination of your bank account.

There are four basic steps needed to facilitate ecommerce on your website.  This diagram combined with our ecommerce FAQ's will give you a good foundation to move forward.

#1 - Get a domain name and start a hosting plan - Finding a good hosting company that will meet your needs is critical. Don't use price as the deciding factor or you may find yourself in trouble down the road when you realize what corners are being cut to give you that low price. You want a dependable and customer service oriented company with secure high-speed servers so that you don't lose customers to website congestion and failures.

Build an Online store - Build an online store (a database driven computer program which contains your products and price information). We offer ShopSite Starter, Manager & Pro.

Graphics - Work with someone who knows how to scan, photograph, and/or manipulate images and files or teach yourself some graphics basics for your new store to upload. If you want to do it yourself then we suggest that you purchase the most current version of Dream Weaver or a similar webpage editing product.

#2 - Payment Processing Services / Gateway - Handles secure, encrypted, real-time credit card transactions over the internet. The merchant account is needed to coordinate the transfer of funds between your bank, a payment-processing service, and a customer's bank.

#3-4 - Payment Processing Services / Merchant Account - Payments get processed and deposited into the company's bank.

More simplified explaination -

How Does the Merchant process Work?

Credit Card processing requires quite a few steps, and several different companies are involved, such as your store, your payment gateway, your merchant account provider, and the bank that issued the customer's credit card. These drawings and explanations provide a simplified version of credit card processing from a merchant's point of view. If you want more information, you can read the detailed version.

Authorizing a Purchase

Authorizing is the process of getting approval for a credit card purchase. Although the sale is finalized, no money changes hands at this point.

  1. The customer types their credit card information into the ShopSite order form.
  2. ShopSite sends the transaction information to the merchant's payment gateway for authorization.
  3. The payment gateway sends the transaction information to the banking network and receives back either an authorization code or a "transaction declined" message.
  4. The payment gateway passes the authorization code (or declined message) back to ShopSite.
  5. ShopSite displays a receipt to the customer, or a "problem" message if the transaction was declined.


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