Washington State University

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Merchant Types
In the payment processing industry, every merchant is classified into a specific “merchant account type” category based on how they collect card information and process transactions.    There are two main merchant account type categories: swiped and keyed, reflecting the basic methods used to capture card information. Within each main category are sub categories, broken down according to the business environment and processing technique. 
Swiped or Card Present

Swiped, or card present merchants directly interact with their customers in person and capture card information by physically swiping cards through a terminal or point-of-sale system. Sub categories of this merchant type at WSU are retail merchants and wireless/mobile merchants.
   A credit card terminal is a stand-alone piece of electronic equipment that allows a merchant to swipe or key-enter a credit card's information as well as additional information required to process a credit card transaction. It is a dedicated piece of equipment that only processes credit cards although many terminals can be used to perform transactions including gift cards and check verification. A credit card terminal typically must be plugged in to a power supply and connected to a telephone line. However, some terminals (such as those used by a wireless/mobile merchant) may be powered by batteries and communicate over the Internet or through a cellular phone data network. When a credit card is processed (either swiped through the magnetic stripe reader or keyed-in to the keypad), it contacts the network to verify if the credit card can be authorized. The transaction is then stored on the machine until the polling window is opened. The machine will either upload the electronic funds directly to the merchant bank, or a polling service provider will dial in to collect, process, then submit the data to the merchant bank. The most popular credit card terminals consist of a modem, keypad, printer, magnetic stripe reader, power supply, and memory card. There is a wide range of memory capacities and other features like built-in printers and debit card pinpads that affect the manufacturing cost of a credit card terminal.

   A retail point-of-sale (POS) system typically includes a computer, monitor, cash drawer, receipt printer, customer display and a barcode scanner, and the majority of retail POS systems also include a debit/credit card reader. It can also include a weight scale, integrated credit card processing system, a signature capture device and a customer pin pad device. A POS system is utilized at the physical location at which goods are sold to customers. Some POS monitors use touch-screen technology for ease of use and a computer is built in to the monitor chassis for what is referred to as an all-in-one unit. All-in-one POS units are useful if space is limited.

Retail Merchants

Retail Merchants typically conduct business in a physical store location or office where they interact face-to-face with the customer. Card information is captured by a magnetic stripe reader that is either incorporated into a credit card terminal or integrated into a point-of-sale system. Retail accounts offer the lowest transaction fees and have the most restrictive rules associated with them. WSU retail merchants include WSU Connections, the North Side Dining Center, and the WSU Creamery.

Wireless / Mobile Merchants

Wireless / Mobile Merchants need to accept and authorize credit cards wherever they are located, which is usually “on the road”. Using a portable wireless credit card terminal, these merchants process on-site, real-time transactions at their customer’s location or a remote merchant location. WSU’s Alumni Association utilizes a wireless cardswipe machine to collect membership and event fees from any location.


Keyed or Card-Not-Present

Keyed, or card-not-present merchants indirectly collect the customer’s card information. There is no face-to-face interaction with the customer, but there may be phone interaction. Sub categories of this merchant type at WSU are Mail Order/Telephone Order (MOTO) merchants and Internet or E-Commerce merchants.

Mail Order/Telephone Order (MOTO) Merchants

MOTO Merchants generally do not meet their customers face-to-face. Orders and credit card information are collected over the telephone, by mail, facsimile machine or via the Internet. Credit card payments are processed by the merchant entering the credit card information directly into a terminal that contains a keypad, by using terminal software installed on a personal computer, or by using a “virtual” terminal that allows the merchant to use a normal web browser to process transactions on a payment service provider’s web site. The transaction requires two steps. Once all of the card information is entered, the data is verified and then the money is subtracted from the cardholder’s limit and placed in a 30-day holding account without actually charging the card. After the product is shipped the credit card is charged for the purchase price. MOTO accounts are processed at a higher transaction rate compared to retail accounts due to the need to take these two steps to process a card rather than just one and a higher risk of fraud since the card and cardholder are not present. The Cougar Athletic Fund is an example of a WSU MOTO merchant as donations are entered into an on-site terminal based on information provided over the phone by the donor.

Internet or E-Commerce Merchants

Internet or E-Commerce Merchants conduct ALL business through a website, which means all credit card information is collected and transactions are processed online, in real-time, using a payment gateway that is built into the website’s shopping cart. All order and credit card information is entered directly by the cardholder into a secure order page. Internet accounts are processed at a transaction rate similar to MOTO accounts. In general, there are five key elements to an Internet or E-Commerce merchant; a web page, web hosting service, a shopping cart program, online payment processing known as a Payment Gateway, and an Internet Merchant Account. WSU Internet merchants include the WSU Alumni Association, the Student Rec. Center, and WSU Career Services.



Resources Needed - People

A merchant account requires adequate staffing to assist in problem solving and ensure accountability, compliance with applicable rules and regulations, separation of duties and proper audit controls. WSU eCommerce has identified five roles which must be filled by departmental staff in order to successfully maintain and manage a merchant account. There is a sixth role that may need to be filled if the merchant is web based.


Primary Merchant Contact Role

The Primary Merchant Contact is the WSU Departmental employee who has fiscal and administrative responsibility for the assigned WSU merchant account. eCommerce and General Accounting - Revenue will look to this person to address any related fiscal issues with regard to the merchant account. This individual may authorize credit card refunds.

Customer Service Role

The Customer Service Provider is the WSU Departmental employee who provides front-line customer service to your buyers. This individual will answer customer inquiries about orders, credit card payments, returning merchandise, and refunds.

Credit Card Charge Role

The Credit Card Charge role belongs to the WSU Departmental employee who has been authorized to accept and process credit card payments over the phone, via mail order, in person or web based virtual terminal. This individual may not have the Credit Card Refund Role in conjunction with this role.

Credit Card Refund Role

The Credit Card Refund Role is assigned to the WSU Departmental employee who has been authorized to process approved credit card refunds. This individual may not have the Credit Card Charge Role in conjunction with this role.

Technical Contact

If you plan to accept credit card payments via the internet, you will either work with an internal web developer or a third party vendor. Your internal web developer may be a departmental employee if your area has a dedicated IT staff or a member of WSU University Publishing Web Services team. WSU University Publishing Web Services provides a comprehensive spectrum of web design, development, support and communications services to the University



E-Commerce, PO Box 641025, Pullman, WA 99164-1025, Contact Us