There are three basic types of merchant accounts available. They are retail/swiped, retail/keyed entry and mail order/telephone/internet.
The retail/swiped account is meant to be used by Òbrick and mortarÓ retail businesses, where you can physically swipe the card through a card reader. Doing it this way provides proof that the card was actually present during the transaction. The rates are lower and there is less risk because the card is present. The retail/swipe account is the best option if you are able to physically swipe the card for 90% or more of your transactions.
The retail/keyed entry account is meant to be used if the card is present but cannot be swiped. This usually comes into play if you are doing business while traveling. For instance, if you go directly to a customerÕs house and you do not have a swipe machine, you can manually imprint the card and enter the information into the electronic machine later on.
The mail order/telephone/internet accounts are meant for those who rarely see their customers in person. Usually the card is not physically present to be swiped or imprinted. The rates and surcharges are usually a lot higher for this type of account because of the higher level of risk involved. This type of account is ideal if you are doing business online. Using the other types of accounts may leave you open to fees, penalties and even charge backs.
When using Internet accounts, additional information (name and billing address) is usually required by the cardholder to verify that it actually is them.