A Third Party Merchant Account is defined as a company that accepts and receives credit and debit card payments on behalf of your business.
Such accounts are beneficial for start up business and small entrepreneurs as they have a low set up cost when compared to setting up an independent merchant account. However, the transaction fees may be higher when compared to a merchant account. Large corporations and big businesses can easily acquire their own merchant accounts. However, at times high sales volume and/or the business industry of the merchant may make banks and merchant account providers wary and even large businesses may fail to acquire a merchant account.  The way third party merchant account processors work is that they provide online businesses unable to obtain or afford their own merchant account, the opportunity to use the processors merchant account.  Thus, when a customer comes to your site they will deal completely with your set up, but when they are ready to order they will be forwarded to the third party merchant account provider’s site. The best third party merchant account providers will give you the ability to customize the form so intricately that the customer will never know that they have left your site unless they check the URL.

Advantages and Disadvantages of a Third Party Merchant Account

The advantages of a third party merchant account are:

1. Fast Set up procedure. Easy start up. Low application fee.
2. Ecommerce enabled.

The disadvantages of a third party merchant account are:

1. Higher transaction fees – Name appearing on the customer’s Credit card statement bears the third party processors ‘name’ – sometimes causing confusion for customer resulting in un-necessary chargebacks and refunds
2. Have their logo on your site to ensure the customer remembers the charge.

Instabill.com tries to ensure that the third party merchant account they provide minimizes the disadvantages by:

• Enabling the merchant to start accepting credit cards online within 2-3 business days. Providing an Integrated shopping cart and built in payment gateway.
• Fraud protection software so that merchant does not need to purchase a SSL certificate.

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