Chances are, if you have ever gone to a store and paid for your items with a debit or credit card, you have used equipment associated with merchant accounts. The card reader is actually a computer terminal that uses a modem to connect to a banking network. Your store and the bank you deal with must be on the same network. Typically NYCE, PLUS, Cirrus, and Jeanie are the most common electronic banking networks.

Typically, a business owner will pay a monthly fee to the business that manages their merchant service privileges. This may be the bank that they do business with, or it can be a third party merchant account provider. Depending on the volume of the business, the associated hardware can come in all shapes and sizes.

Aside from providing a computer terminal, merchant account services providers will also repair the machines and upgrade them as necessary. In some instances, this may be provided as part of the monthly service fee. Other merchant service providers may elect to charge you on a per usage basis.

Without a question, credit card processing can greatly expand the ability of a business to attract more customers and make more sales. That said, there is a growing body of vendors that refuse credit cards. In lieu of this service, they pass the savings in transaction fees associated with credit cards on to their customers. In some cases, this can range anywhere from 10 to 20% per item. Perhaps some day we will all have the benefit of the usage of credit and debit cards without such exorbitant fees attached to them.