OPENING A MERCHANT ACCOUNT: 5 THINGS YOU NEED TO CONSIDER
Nowadays, cash sales and paper invoices are no longer an effective way to collect payments. If you want your business to grow, you should be able to accept credit card payments and for that you need a merchant account.
In the following article, you will find out what are the most important things you should know before applying for a merchant account.
THE APPLICATION PROCESS
Your journey to credit card processing will begin with the application process. First you will need to fill out an application form, which will take only few minutes to complete. The data you’ll be asked to submit includes information about your company, as well as it’s authorized signer on the account, bank account and routing numbers, tax ID and previous payment processing volumes (or your estimated processing volume if you have a new company).
THE UNDERWRITING PROCESS
Providing credit card processing services is a risky business. Every dollar transacted through the payment provider’s system can be charged back, and if the merchant’s business goes under, the account provider can incur losses as well.
Therefore, every payment processor assesses their potential client’s level of risk carefully. They look especially at the possibility of chargebacks and company’s legitimacy.
So, if your business is considered high risk due to a higher chargeback ratio or due to the nature of the products you sell, we encourage you to work with a partner who is specialized in providing high risk merchant accounts, as they can make all the necessary considerations while assessing your company
To prove your company’s existence and financial situation, the underwriter will ask you to send some supporting documentation. The higher is your risk level, the more documentation will be needed.
If you want to process larger amounts, be prepared to provide a detailed financial information, such as up to two years bank statements in the form of profit and loss statements along with balance sheets.
YOU'LL NEED A BANK ACCOUNT
Before applying for a merchant account, you will need a business bank account, as it will be the destination of funds for the credit card payments your clients will make. If you don’t have one yet, don’t worry, as you can open one easily at your local bank by providing your business licence and EIN (employer identification number). For a smooth underwriting process, we suggest that you keep sufficient funds on your bank account to cover the monthly processing fees.
PCI Data Security Standards (DSS) is a set of rules established by credit card companies that ensure merchants are safely processing their customer’s card payments. Although you don’t need to achieve PCI compliance before opening a merchant account, but as you will need to soon after, it is best to think about it as soon as possible.
And how can you achieve PCI compliance? By operating you business in a secure manner. This means that you will need to install anti-virus system, implement strict user ID authorization and password policies etc. Luckily, many merchant account providers will guide you step by step through PCI DSS Compliance standards and so make your life much easier.
After completing the application process, depending on how quickly you submit all required information and supporting documents, your merchant account can be set up within a business day. However, don’t be in rush. Before signing your contract, study the Terms and Conditions section carefully, especially make sure you agree with all the transaction fees and funding time.
Having the relevant knowledge at your fingertips will definitely smoothen your application process and your merchant account will be setup in no time.
START ACCEPTING CREDIT CARD PAYMENTS
Apply today and let our experts find you the most suitable merchant account solution for your specific business for highly competitive pricing.
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