Merchant Account Types

There are two main merchant account type categories which are Swiped and Keyed. These are basic methods used to capture card information.

Swiped or Card Present merchants directly interact with their customers face-to-face and capture card information by physically swiping cards through a terminal or point-of-sale system.

• Retail Merchants: Retail merchants typically conduct business in a storefront or office where they interact with their customers face-to-face and physically swipe cards through a terminal or Point of Sale system.
• Restaurant Merchants: Restaurant merchants require the ability to add tips to their charges using a special tip function. Restaurants authorize a customer’s card for a certain sale amount and then settle that authorization with an adjusted price to include the tip amount.
• Wireless/Mobile Merchants: Wireless or Mobile merchants need to accept and authorize cards wherever they are located. Using a portable wireless terminal, these merchants can process on site.
• Lodging Merchants: Lodging merchants, for example a hotel, authorize a customer’s card for a specific sale amount and customer’s length of stay. The processed amount will adjust and settle out that authorization a day or more later to include additional fees such as taxes.

Keyed or Card Not Present merchants collect their customers’ card information and can process transactions in various ways.

• Keyed Face to Face Merchants: Merchants meet their customers in person to deliver the product or provide the service, but don’t actually collect card information with the customer or card present. They take orders over the telephone, fax, mail, email, or over the Internet. Then they manually key-enter card information into a terminal, software, payment gateway, or other point-of-sale system.
• Mail Order/Telephone Order: Some merchants rarely, meet their customers face to face. Instead, these merchants collect orders and card information over the telephone, by mail, fax, or the Internet. They then manually key-enter transactions through a terminal, software, payment gateway, or point-of-sale system. Once payment for an order is confirmed, the product is shipped for future delivery.
• Internet or E-Commerce Merchants: Merchants conduct all business through a website, so all card information is collected and transactions are processed online, in real-time, using a payment gateway that’s built into their website’s shopping cart. Once the order/sale is confirmed, the card is charged instantly and the product is shipped for future delivery.