A merchant account is one of the essentials to the success of your business. Cash sales, snail mail, and paper invoices are no longer an effective way to collect payment. If you want your enterprise to grow, you should be able to accept credit cards. And for that, a merchant account is what you need.
Thanks to straightforward companies like eMerchantBroker, acquiring a merchant account is now fairly easy. However, you still have to know what to expect when applying for one.
- The application process
Your journey to credit card processing will naturally start with an application. Many account providers provide online applications which take only a few minutes. The data you’ll be required to submit may include information about the business as well as its authorized owners, bank account and routing numbers, tax ID (EIN) and previous payment processing volumes (estimates if it’s a new business).
Providing payment services is risky business. Not only can every dollar processed through the firm’s system be charged back, but in case the client’s business goes under, due to financial hiccups, legal problems or what-not, the account provider can incur losses as well.
Therefore, a system has to be in place that allows payment processing firms to vet potential customers. Consequently, when opening a new merchant account, expect the company to assess the level of risk of your business, by looking at things like the possibility of chargebacks, and the legitimacy of your operation.
And if your business is the high-risk type, we recommend working with a provider that is experienced with high-risk payment processing and can thus make the necessary considerations while underwriting.
- You will need a business bank account
This might seem obvious, but a business bank account is one of the things you should have before you approach the provider for a merchant account. This bank account will be the destination of funds for the card payments your customers make, as well as where your transaction fees will be debited. While not necessarily a requirement, it is advisable to keep a bank balance that is sufficient enough to cover your monthly processing fees.
- PCI compliance
The PCI Data Security Standard (DDS) is a set of rules that ensures merchants securely process their customers’ card payments with merchant providers. Achieving PCI compliance before you open an account is not a requirement, but because you will need to soon after, you should probably start thinking about It now.
And how do you achieve compliance? By making sure your business is operating in a secure manner, through steps such as shredding confidential documents, installing anti-virus and firewall systems, implementing stringent policies regarding password and user ID authorization, etc. Thankfully, many competent processing companies will guide you through PCI DDS compliance.
With a firm that works on its toes, your business can start accepting card payments as early as the next day, after submitting your application. However, do not be in a rush. Be prepared to provide all the necessary information, and even more importantly, study the Terms and Conditions on your application carefully, including all the transaction fees.
Having the relevant knowledge at your fingertips will significantly smoothen the process of opening a merchant account.