The merchant accounts are found in three distinct categories. The transaction fee of these three merchant accounts is the main outstanding difference between them. However, the rules for using and operating these accounts also differ. The three major types of merchant account include:

I. Retail Merchant Account

This type of merchant account is known to have the lowest transaction fee requirement. The rules that are associated with the transactional fee are highly restrictive. The account has the following features:

· Credit card should be present when a high percentage sale of credit card is made.

· Swiping of the credit card by passing it through the terminal of a physical credit card.

II. MOTO Merchant Accounts

This merchant account is also known as Telephone Order accounts. It has the following features:

· The rate of carrying out a transaction is slightly higher.

· They are used when swiping of credit cards is not possible.

· They are mainly used to address the needs of credit cards processing of mail companies who only receive their sales through mail or telephone.

This type of merchant account requires that the users process payments through credit cards by simply entering the information of the credit card straight into the keypad terminal. The keypad terminal is connected to terminal software which can be either installed on a private computer. However, the merchant can be allowed to use a virtual terminal that will allow him or her use the Web Browser to process the given financial transaction on web sites with service providers.

III. Internet Merchant Account

This is an account which enables a merchant user obtain credit card payment from the given client via the internet. The billing information is transmitted to the internet account supplier. The unique needs that have arose as a result of world trading needs; this specialized account has been created purposely to address such needs. Its operation has the following features:

· A virtual terminal is used in processing of credit cards payments.

· A shopping cart or a HTML which is customer designed can be used.

· Opening this account is higher because it deals with special online credit card transactions.