An account where merchants can accept credit card payments is known as a merchant account. Merchant accounts can be acquired through credit card companies, banks, or any other payment processor. A merchant wanting to take credit card payments must have a merchant account.

There are three major forms of merchant accounts. One is the retail merchant account. This account generally offers the lowest transaction fees, but often comes with stringent rules. Retail merchant accounts mostly require credit card sales be done with the "card present." In other words, the card has to be swiped through a credit card terminal for the transaction to take place. Retail merchant accounts are usually linked with restaurants, small hotels and grocery stores. Retail merchant accounts are not suited for merchants who want to conduct business through the Internet or the mail.

Mail Order Telephone Order (MOTO) accounts generally charge higher transaction rates; these accounts are used when the credit cards cannot be physically utilized. In this case, merchants process the payments by entering the customers credit card data onto a personal computer, or through a standard web browser, where they can process the transaction on the payment service provider's website.

Internet merchant accounts are quite similar to MOTO accounts in that the credit card need not be physically used. However, these transactions can only be done through the Internet. Merchants with Internet accounts employ a payment service gateway or a virtual terminal to process credit card transactions.

It is imperative to choose the appropriate form of merchant account for the business you are conducting. Also, it is wise to carefully go through the terms of service of the providers, as many charge a fortune and have strict rules.