credit card over a cellular or land-line telephone. With this method, a merchant typically imprints their customer's card with an imprinter to create a customer receipt and merchant copy, then process the transaction instantaneously over the phone. Payment gateway A payment gateway is an e-commerce service that authorizes payments for e-businesses and online retailers. It is the equivalent of a physical POS (point-of-sale) terminal located in most retail outlets. A merchant account provider is typically a separate company from the payment gateway. Some merchant account providers have their own payment gateways but the majority of companies use 3rd party payment gateways. The gateway usually has 2 components: a) the virtual terminal that can allow for a merchant to securely login and key in credit card numbers or b) have the website's shopping-cart connect to the gateway via an API to allow for real-time processing from the merchant's website. Level 2 or level 3 processing – purchasing cards For business-to-business (B2B) and business-to-government (B2G) purchases, these interchange fees fall into one of 3 processing categories — Level 1, Level 2, or Level 3. Level 1 has the highest rates. Level 3 has the lowest rates. Level 3 detail refers to passing line-item detail; information generally found on an invoice; PO number descriptions, quantities….other details, level 2 refers to passing tax amount along with invoice/PO#. Both Visa and MasterCard apply higher interchange rates for commercial transactions that are accepted w/o level 3 detail. These are applied to the interchange before a processor adds their fee and range from .80%-1.5% When set up for level 3 processing transactions over $5,984.61 government, $8725 non-government, are eligible for high ticket interchange rates. Interchange varies from .50-1.45% depending on the type of card and size of the ticket. Merchant account marketing Merchant accounts are marketed to merchants by two basic methods: either directly by the processor or sponsoring bank or by an authorized agent for the bank and additionally directly registered with both Visa and MasterCard as an ISO/MSP (independent selling organization/member service Marketing details are by card issuers like Visa and MasterCard and are enforced by various rules and fines. A few of the largest processors also partner with warehouse clubs to promote merchant accounts to their business member Marketing by banks A bank that has a merchant processing relationship with Visa and MasterCard, also known as a member bank, can issue merchant accounts directly