Merchant Account Terminology You Need to Know

Before starting the bid process, it helps to know the lingo:

Merchant Account: Bank service that allows you to accept credit and debit cards, gift cards, and other types of electronic payment.

Acquiring Bank: The bank that holds your merchant account. If you can get a merchant account directly with your own bank, that’s best. But usually, you’ll need to go through an ISO.

Interchange: Base rate charged by Visa and MasterCard; merchant account providers build their fee structures on this rate.

ISO: Independent Sales Organization; these are third-party merchant account providers. The best offer full service packages that include the hardware and/or software you need.

MOTO: Mail Order / Telephone Order; these are card-absent transactions that do not require physically swiping the card; this category usually includes Internet transactions. Card-absent transactions are generally less secure and treated as high-risk processes, and thus garner higher fees for providers.