A merchant account is a specific type of bank account that enables businesses to accept payments from their customers using a debit or credit card. In other words, a merchant account is an agreement between three parties: a retailer, a merchant bank, and a payment processor for the purpose of processing credit and debit card payments. When a customer pays for their purchase with a credit or debit card, the money is first deposited into the merchant's account and then transferred to the company's bank account. The transfers to the bank account are usually organized daily or weekly.

Types of merchant accounts
There are several different types of merchant accounts, which can usually be broken down into two categories, and the description of each type gives a pretty clear idea of which of them is best for your business. The main categories of a merchant account are searched and entered.

A swiped merchant account is typically used when a company meets their customers in person and during that meeting a customer can swipe their card to pay for the products and services. This type of merchant account is usually described in more detail in relation to the use of said account:

Retail Merchants - conduct transactions in a retail environment. The customer's card is swiped through a terminal and typically a signature or PIN code is captured;
Wireless / Mobile - Similar to retail, but in a wireless environment with a mobile device. An example of such a dealer would be a taxi driver or a pizza delivery man;
Restaurant - similar to retail, but with an additional function - possibility to calculate tips. After the name of this type of merchant account, it is mainly used by restaurants and cafes;
Accommodation - similar to retailers, but the company can adjust the payment amount according to the additional fees. This type of merchant account is used by hotels and bed & breakfasts in case a customer has used a minibar or other extras.
Keyed merchant accounts are used when the information on the loyalty card is captured by phone or internet (or sometimes even in person) and entered by the employee himself. While this merchant account application is more time consuming and less convenient, it is also less expensive than the merchant accounts discussed earlier.

Internet or E-Commerce Merchants - for businesses that operate through a website and use the Internet Payment Gateway service to collect and process the customer's card information accordingly;
Order by post and telephone - the customer's card information is transmitted by telephone, post or Internet and processed manually either via a credit card machine or a virtual terminal;
Face to face - this type of merchant is similar to a wireless / mobile swipe merchant account, but instead of investing more money in purchasing a mobile device, it is possible to capture the required information from the customer and enter it over the phone.

Advantages and disadvantages of a merchant account
While selecting the most appropriate type of merchant account based on the intended application is critical to the best experience, there are some general pros and cons that need to be discussed.

Advantages:

Increase in sales - through greater convenience compared to check or cash payments;
Faster transactions;
Security - no risk of theft or accidental mistakes by employees when handling cash;
More choice - the more payment options you offer your customers, the easier it is for them to shop with you.
Ability to accept credit or debit cards with multiple currencies.

Disadvantage:

Cost - typically a company has to pay for every transaction;
Delay - customer funds are deposited into the merchant account first and only later transferred to the commercial bank account;
Fraud - There is always a risk of identity theft or internet fraud;
Chargebacks - It's easy for customers to request a chargeback, especially if the money is still in the merchant's account.

In general, all jurisdictions can be divided into classic offshore, low-tax jurisdictions and prestige jurisdictions. The prestige of a jurisdiction corresponds to its rank, which is determined by considering and evaluating information from the International Sanctions List, the OECD Gray or Black List and the EU Jurisdiction White List as well as data on the development of financial markets to determine whether the jurisdiction is FATF AML is deficient and whether there are money laundering concerns. These are the basic criteria that matter in determining whether the jurisdiction is prestigious or not. It cannot be considered prestigious if it is on a financial blacklist.

Austria, France, the United Kingdom, the United States of America and Switzerland are among the top five most reputable jurisdictions for incorporating a company.

A general overview of Austria
Registering a company or start-up in this territory allows the owner(s) to participate in all projects initiated by the Austrian government. The basic company types available are LLC, ULP, PJSC, PLLC, LLP, and JSC.

Taxes: The income tax rate is 25%, with a minimum corporation tax of EUR 500, plus 20% VAT and a capital tax that varies between 0.8% and 1%. If the subsidiary is registered within the EU, the tax rate on dividend income is 0%; if not, it is 25%.

Austria has agreements with more than 90 countries that enable companies to avoid double taxation. It has no exchange control. This jurisdiction ensures the confidentiality of business data.


A general overview of France
France is a respectable jurisdiction that allows your company to offer products and services bearing the mark of a European company. The basic legal structures available are SP, GP, PJSC, PJSC, LLC, CLS and LLPE.

France offers a number of options: the ability to obtain credit from French banks, the ability to obtain a residence permit, no taxation for companies registered in the country doing business outside of France, and no exchange controls. France has agreements with more than 89 other countries that allow companies to avoid double taxation.



A general overview of the United States of America
The US offers a respectable, highly trusted jurisdiction for a company to register, allowing it to offer products and services bearing a US company's trademark. This jurisdiction does not impose tax obligations on entities designated as non-resident and also permits nominee services. There is no taxation for companies incorporated in the country that do all their business outside of the United States.

The basic legal structures available are private contractor, corporation, branch of a foreign corporation, representative office of a foreign corporation, partnership, LLC, joint venture, or LLJSC.


A general overview of Switzerland
The good reputation of this jurisdiction is based on several factors, such as strong business development, a dynamic economy and a track record of innovation. The main corporate forms available in Switzerland are LLC, ULP, JSC, Commandite Partnership and Subsidiary.

Switzerland offers a high level of confidentiality, the world's leading currency, mechanisms to avoid double taxation, an appropriate tax system with tax rates depending on residence, income level and legal form of the company, tax optimization opportunities and the possibility

A general overview of the United Kingdom
The UK is considered a respectable jurisdiction due to its high level of legal protection, a simple and transparent tax system, the ability to charge VAT and the availability of nominee services.

The basic company types available in the UK are PC, limited liability company by guarantee, ULC and LLC. Again, there are no tax obligations for UK registered companies operating exclusively outside the country. Corporate tax rates depend on profit (between 20% and 24%). The UK has agreements with more than 100 countries that allow companies to avoid double taxation.