Merchant Account Payment Gatways
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European Merchant Accounts
While countries in the UK and in North America have been responsible for most of the growth of internet commerce in recent years, that trend is slowly starting to change as more and more Europeans gain access to the internet. As incredible as it might sound for residents of the UK, the rest of Europe has been slow to catch on to the obvious benefits of shopping online. And while part of this was due to the simple fact that they did not have internet access, slow growth in Europe, especially in EU nations, can also be attributed to cultural differences.
For example, only one in every ten Italians made an online purchase last year. It is also a fact that only about sixty per cent of the residents of EU nations have internet access. But this number is steadily increasing, which means that there is an awful lot of room for growth in Europe when it comes to online shopping.
That may be why a record number of UK businesses are applying for European merchant accounts . These accounts give sellers the ability to process online credit and debit card transactions. Well, actually it is a financial institution that does the processing and for this service they charge sellers a commission.
Why are they necessary? Without a merchant account a seller cannot guarantee a secure transaction, which means that no customer in their right mind would place an order and divulge his credit card information. There is, however, a catch. These rates are based almost entirely on the risk associated with doing business in a given industry. For instance, if you are involved in online gambling or adult entertainment, you will be considered a high risk merchant and you will be charged higher rates for each and every transaction.
There are many reasons why service providers charge certain businesses higher rates, but mostly it has to do with what are commonly called chargebacks. These are fees that credit card companies charge service providers when a customer disputes a specific charge. The charges can make the cost of doing business for service providers very costly, which is why they are often apprehensive about providing service for companies that compete in high risk industries.