To accept credit cards online (or instore), you need a Merchant Account.

This is issued by a PSP (Payments Service Provider) and enables you as the Merchant to accept Credit Card (and other digital) payments.

PSP is a traditional bank, nonbank fintech or their authorized agents.

A PSP makes the Yes / No decision to offer you a Merchant Account based on Acquirer Risk, which in turn is determined by your company size, nature of goods sold, sales volumes, financial soundness, and other factors.

If it’s a YES, the Merchant Account is accompanied with some paperwork and a POS terminal (for instore credit card acceptance) or Electronic Payment Gateway code (for online credit card acceptance).

The most obvious PSP is the Merchant Services SBU of a bank. But, unless you’re a midsize or big business, you may find it challenging to get your calls returned by anyone from the bank.

In that case, you can approach the following intermediaries:

  1. Independent Sales Organizations for Instore credit card acceptance and Electronic Payment Gateways for Online credit card acceptance e.g. CyberSource, Authorize.net, ccAvenue, RazorPay, et al
  2. Merchant Aggregators e.g. PayPal & Stripe for Online credit card acceptance, and Square for Instore credit card acceptance.

ISOs and EPGs are mere resellers of Merchant Accounts from Acquirer Banks. While they may be more responsive to a small company, the final yes / no decision on whether to offer a Merchant Account to a given company is still made by the Acquirer Bank. You might not get a different decision by going to an ISO / EPG as compared to going directly to an Acquirer Bank.

OTOH, Merchant Aggregators sign up for a Merchant Account with an Acquirer Bank in their own capacity and parcel it out in multiple pieces to end merchants. In the process, they take over the Acquirer Risk from the Acquirer Bank onto themselves. Beyond setting high level guidelines on permitted and banned merchant categories (e.g. Yes for Porn, No for CBD), the Acquirer Bank is not involved in the yes / no decision for a given Merchant’s application for Merchant Account. As a result, Merchant Aggregators offer Merchant Accounts quite liberally. Many micro and nano merchants who won’t qualify for a Merchant Account directly from an Acquirer Bank – or their ISOs / EPGs – will likely get a Merchant Account from a Merchant Aggregator. Not only is it easier to get a Merchant Account from a Merchant Aggregator, it’s also faster to onboard it – you can literally sign up for a PayPal account, add the code to your website, and start receiving credit card payments in five minutes. But that’s only into your PayPal wallet account.

From there to sighting good funds in your bank account is a totally different story. It can be rife with frozen accounts, held amounts, unbelievably bad customer service, severe tension, and so on.

I’ve written on this topic on my personal blog. Once I get more clarity on Quora’s policies regarding references to personal websites, I’ll come back and post the hyperlinks to the specific posts. Until then, let me just say that I’ve been there and done that and my T-Shirt is emblazoned “Tread Very Cautiously”.