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What a Merchant Service Account Actually Is

On Authorize.net's page, card money passes through a merchant account. Here is what that account does and what it costs.

A customer taps a card. The screen says approved. Authorize.net's page describes a stop in between, in a merchant account. This page explains what that account is, what it does, and what it takes to get one.

What a merchant service account is

Authorize.net's pricing page says a merchant account is a type of bank account that lets businesses accept payments by debit or credit cards. Authorize.net's page says you must have a merchant account in order to accept credit cards.

It is not the same as the bank account you use every day. Authorize.net's page compares a merchant account to a line of credit that a business uses to take payments or hand out refunds.

What the account does with your money

Here is the path a sale takes. The customer pays. The payment data travels through a gateway. The card networks approve the charge. Then the funds land in your merchant account. From there they move to your business bank account.

Authorize.net's pricing page says its merchant account holds funds from card transactions and deposits them into your business bank account. Authorize.net's page says the Merchant Service Provider handles moving the funds into your bank account.

How long that transfer takes is up to the provider. Authorize.net's pricing page says the Merchant Service Provider handles the transfer, so the exact deposit timeline may vary. Authorize.net's page also says the industry average funding period is between three to five business days. If speed matters to you, that timeline is worth asking about before you sign.

How approval works

Because the account works like a credit line, someone has to judge the risk of giving you one. Authorize.net's pricing page says an underwriter looks at your industry, processing history, personal credit, and business creditworthiness when you apply for a merchant account. Authorize.net's page says merchant account approval depends on factors including industry, credit history and responsiveness.

Approval speed varies too. Authorize.net's page says a completed Authorize.net Payment Gateway account application is approved automatically. That is the gateway piece, not the merchant account piece, and the two should not be confused. The section on gateway-only and all-in-one plans explains the difference.

The fee types attached to a merchant account

Keeping a merchant account open costs money. Authorize.net's page lists merchant account fee types including percentage-based fees, fixed per-transaction fees, and monthly service or gateway fees. It lists more merchant account fee types including batch or settlement fees, cross-border surcharges, and PCI compliance fees.

Authorize.net's page says these fee types together shape the total cost of payment acceptance and influence which pricing model fits a business.

Authorize.net's page says the payment gateway does not have a contract or early termination fees. Read the terms before you sign anything.

Gateway-only versus all-in-one plans

A merchant account and a payment gateway are two different things, and some companies sell them apart. Authorize.net's pricing page says a payment gateway securely transmits payment data between a customer, your website or terminal, and the payment networks. The gateway moves the data. The merchant account holds the money.

Authorize.net's pricing page says its Gateway Only plan connects to an existing merchant account without replacing it. Its page says the gateway only option allows you to connect to any merchant account provider. Authorize.net's page says if you have an existing merchant account, you can update your gateway with parameters from your merchant provider.

There is one catch. Authorize.net's page says an account that is not solely owned cannot be used with the Authorize.net gateway. If your current account is shared with another party, ask your provider about ownership before you count on this route.

The other path bundles both pieces. Authorize.net's page says its All-in-One plan combines a merchant account and a gateway. Authorize.net's page says its all-in-one solution includes help providing you with a merchant account.

Which shape fits depends on what you already have.

This page explains the account itself. The cost of a single sale and the speed of your payouts are separate questions.

For the cost of a sale, read what a $40 card sale costs at the counter.

For payout speed, read what instant payouts cost.

Authorize.net's page says you can contact them online by filling in a quick form. A representative will help you get started by phone. Its page also says partners will work with you to ensure you have everything you need to sign up. Plans and prices on these pages shift over time, so check the processor's own page for current details before you commit.

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