If in the first case settlements are made within the payment system, and it acts as a guarantor and intermediary, then when paying with a plastic card, the number of risks and intermediaries in the payment process increases.
To accept money, the online store owner opens an account with a bank that has the hardware and software for collecting payments from plastic cards. The payment button on the seller's website redirects the buyer to the bank's (acquirer) website, where he enters his data. The information is processed and redirected again. This time to the bank (issuer) that issued the plastic card. Interbank settlements take place, and only after that the money is credited to the seller's account.
The described payment processing system and bank account are called by the same term – merchant account. The term comes from the English phrase Merchant account, which translates as 'merchant account'.
At first glance, the payment processing system is not complicated, but banks are reluctant to engage with it. The reason lies in the presence of increased risks associated with possible refunds of payments made due to non-delivery of goods or delivery not in the form the buyer expected. Another threat is the activity of so-called carders (fraudsters who steal payment information). In this case, banks risk their own money, which guarantee to the client and to each other the safety of funds involved in the transaction.
To protect themselves, banks must carefully vet the companies to which they provide a merchant account. However, at the same time they are busy with thousands of other higher-priority operations, and therefore intermediary companies are usually included in the chain, whose task is to check the participants in the process and redirect payments from the buyer to the bank and from the bank to the seller.
The intermediary handles the control of refunds and the imposition of fines for them. Intermediaries charge fees for their services. Their rates appear as a percentage of the transfer amount plus the cost of the operation.
The advantage of working through an intermediary is that online store owners do not have to open their own merchant account with a bank.
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