There are a myriad of misconceptions when it comes to these accounts. Merchants who are interested in exploring the possibility of accepting credit cards should check their assumptions at the door. Fact: every merchant that accepts plastic must pay every time they swipe a card. However, these fees differ widely from industry to industry. Comparing a company that does business with one that accepts payments in person is a classic error.

Merchant service providers are often bankers, and like all bankers they consider risk. In fact, it is their most pressing concern. A company that accepts payments on the Internet never actually comes in contact with the cardholder, which means the card could be stolen. If the payment is unauthorized, the real cardholder will request something called a chargeback. A chargeback occurs when a customer asks for a refund. Chargebacks are quite common on the Internet, since it is much easier to use a stolen credit/debit card online than it is to use it in person.

The traditional merchant has several ways of ensuring that the person who hands over a card is who they say they are. He can ask for ID; he can check to see if the signature on the receipt and the back of the card match; he can even phone the bank to verify the information. As a result, the chargeback fee is rarely assessed to regular brick and mortar stores. Not surprisingly, their fees are much, much lower than online merchants.

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