GLOSSARY TERMS

M - Commerce
E-commerce transactions performed over wireless devices, such as cell phones, pocket PCs, PDAs, etc.

Mail/Telephone/Internet Discount Rate
The discount rate (or Credit Card Fee) for internet/mail/telephone transactions is typically higher than the rate for traditional types of businesses. This is due to the increased risk of fraud in card-not-present transactions.

Merchant
Any person or persons selling goods or services online.

Merchant Account
An account set up by a bank which allows a business to accept credit cards and deposits collected funds into the business checking account. Merchant providers assume a risk by allowing other businesses to accept credit cards under their name, and rely on those businesses to deliver the products or services to the customer as agreed.

Merchant Account Provider
A company that can help a business establish a merchant account relationship with a bank, suitable to their credit history and processing needs. Also called Independent Sales Organizations, these companies make money through either an upfront fee, application fee, or a per transaction fee. The bank will handle the charging and depositing of funds, and unless the Merchant Account Provider manages its own Gateway, they probably resell another company’s system and will play little or no part in the actual processing of the credit card transactions.

Merchant Bank
Any financial institution that works with businesses to enable them to process and accept credit card payments. This service is provided in exchange for processing fees. Ideally, you want to apply for a merchant account with the bank that handles your business checking account, but this is not mandatory. If you have reasonably good credit, you shouldn’t have much trouble finding a bank to carry your merchant account, but many new or at-home companies may have trouble getting approved. Some merchant banks allow other businesses (Merchant Providers) to resell their merchant accounts, and then handle the transaction processes for those businesses.

Merchant Identification Number
The ID number assigned to your business by your financial institution.

Merchant service provider (MSP)
A bank or other institution that offers credit card processing services, and usually also provides merchant accounts to merchants and retailers.

Micropayment

Merchants who sell products, services, or information for very small amounts, from a few cents to a few dollars, use a payment acceptance method called micropayments, because it is generally not profitable to use a traditional merchant account for processing such small payments.

MO/TO
An abbreviation for mail order (MO) or telephone order (TO) transactions.

Monthly Minimum
The minimum monthly fee charged by most merchant providers, usually around $30. This fee is only imposed when your Discount Rate charges do not meet the monthly minimum amount.