4 Tips to Obtaining a Canadian Merchant Account

Jul 12, 2018

Canadian-based online businesses need to think about a few things before they apply for just any merchant account, which allows them to accept and process credit card payments safely.

Though you can expect to meet some challenges when you apply for a Canadian merchant account, the process can go pretty smoothly if you know what to look for and think about when it’s time to apply.

4 Factors to Consider

1.    Use a Processor Where You Target Customers

To protect your business and consumers from exorbitant fees, you need to use a processor that is based in the country where you are pursuing the most business.

If you are a Canadian business that sells mostly to customers in your home country, then the best way to maximize profits and to ensure your customers don’t get hit with an international surcharge by their card issuing bank is to use a processor in Canada.

However, if you promote a majority of your products to people in the United States, then you want a processor from there. If not, you will be charged additional fees on any transaction made with a Visa or MasterCard. These cross border fees mean that you could be looking at rates of up to 2% higher than usual.

Also, think about your customers. Card issuers in the United States charge customers a 1% surcharge on transactions outside the country. So, your customers in the United States get slapped with this fee if you use a Canadian merchant account. Obviously, this is not good for business and can end up hurting your bottom line.

2.    Think About the Money

There is no question that the broader your customer base, the better. However, don’t forget to think about currency. When it’s time to apply for a Canadian merchant account, be prepared to explain what type of currency you want to use to process transactions.
Again, if most of your customers are in Canada, it makes sense to handle transactions in CAD currency. By using a local processor, your business will be setting itself up for the lowest fees, the quickest funding, and the best possible customer service.

But, if you are a Canadian merchant that plans to market its products and services in the United States, then a merchant account and processor based there is your best choice. By choosing this option, you will have access to the quickest funding, best support, and lower fees.

If your scope is much greater, such as reach customers worldwide, your merchant account service provider should set you up with a European Union-based bank that can support a variety of currencies.

3.    Know and Understands the Code

To protect your business and your customers, make sure you and your provider understands the Code of Conduct for the Credit and Debit Card Industry in Canada.  Passed down from the Financial Consumer Agency of Canada, the code governs and applies to all payment card networks and their participants. The goal of the code is to ensure merchants and consumers clearly understand both the costs and benefits of using and accepting credit and debit card transactions. Additionally, the code provides merchants with increased pricing flexibility, and it allows merchants to freely select the payment options they want to accept.

4.    Look for Industry Experience

The best Canadian merchant accounts often start with a seasoned provider that is knowledgeable about the industry in your neck of the woods, as well as other places. Experienced merchant account providers have connections with Canadian banks and those around the world and, therefore, will have a number of ways to get you the Canadian merchant account that works best for you. For instance, the right merchant account provider will know that some successful businesses have several merchant accounts that can support many types of currency.

Before you move forward with a contract, make sure the merchant account provider discusses you customers, currency, and your goals. The right provider will not only offer fraud protection and chargeback mitigation tools, it will gain insight into your business by looking at the specifics of your business. Then, it will suggest the type of merchant account or payment solution that will best support your needs.

When It’s Time to Choose a Canadian Merchant Account Provider

If you have a good business plan, understand your customer base, and know the currencies you need, then obtaining a Canadian merchant account will be easier than you think.

When you are ready to apply for a Canadian merchant account, consider a merchant account services provider, like eMerchantBroker.com (EMB). It specializes in working with Canadian-based businesses, as well as high-risk businesses and merchants of all types and sizes. EMB, which is a trusted, reliable payment solutions provider, offers a simple and fast online application process.

Let us help you get a high risk merchant account today!

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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