A merchant account is a business account that allows businesses to accept and process credit card and sometimes mobile transactions. Merchant accounts are a must-have for businesses that accept electronic payments and businesses that are 100% online-based. To have a merchant account, a business has to partner with a merchant-acquiring bank.
Online merchant account instant approval eliminates the waiting time between the application and approval of the account allowing businesses to start accepting electronic payments faster.
How To Acquire A Merchant Account
Do your research before choosing where you will open your merchant account. There are a variety of companies in the market that offer merchant account services. Some companies offer merchant accounts for businesses in a particular industry while others specialize in a specific transaction type.
These companies also have varying charges( setup, monthly, and maintenance fees). Hardware charges, customer support, and contract type and length also vary between companies. If you have friends with similar businesses to yours, you can ask them about which service is best for your business.
If your bank offers merchant accounts, you can enquire about their services and see if they suit you.
You can also consider the types of products or services you offer, the nature of your business and your sales volume. Choose a service provider that suits your needs.
Ensure Your Paperwork Is In Order
When applying for a merchant account, you will need to provide your business information. Before you do that, ensure your business has a license, tax ID number, and business bank account.
Your contact information, financial statements, and credit card may be required in case you need to make an application payment.
Once you have identified the company you want to use to open your merchant account and have your paperwork in order, you can go ahead and apply for the merchant account. Some companies charge an application fee.
How To Apply For A Merchant Account
Before applying for a merchant account ensure you have good credit history and no unresolved issues with other merchant accounts.
For businesses that do not accept payments online, look for a service provider that is best suited for your needs. Businesses that process online payments can apply for an internet merchant account.
- Enter your business name, address and phone number(s).
- Enter your employer identification number and the type of industry your business operates in. Also state how long you have been operational.
- Provide information on the products and services you offer. The service provider can estimate your sales volume using this information.
- Enter your information as the business owner. Provide your name, phone number, social security number. Indicate the nature of your business and your title/role in the business.
- If the provider requests for references, provide that information. You can also be asked for your account number and routing identification.
- Submit your application.
Wait For The Application To Be Reviewed
The merchant account provider will evaluate your application before approving/declining it. When evaluating your application, they consider:
- How long you have been in business
- Type of business and transactions
- Previous possession of a merchant account
- Business and personal credit scores
- The truthfulness of the information provided in your application
High-risk businesses sometimes have their application denied or approved with additional higher fees. This usually takes 4-6 business days.
What Credit Score Is Needed For A Merchant Account?
You should have a credit score of 500 or higher. Having a credit score of less than 500 makes you high-risk. However, this doesn’t mean that you cannot apply for a merchant account. You can apply for one with a high risk merchant account provider. Due to the high risk, you may be required to pay higher processing fees and have reserve funds in your account.
Merchant Account Costs
You will incur the following costs while applying, setting up and operating a merchant account.
- Application fee. This is charged by some service providers.
- Set up fee(does not include the cost of the credit card machine)
- A cancellation fee if you terminate your contract before it’s over. Some service providers do not charge for this.
- Batching fee for processing high volume transactions.
- Payment gateway fee for online businesses.
- A flat rate of between $10 and $30 for the monthly or annual fee.
- Statement fee for the credit card statement they send you via email.
What Is Instant Approval?
Instant approval means you are approved for a merchant account as soon as you apply for one. Although some service providers approve accounts faster than others, no service provider offers instant account approval.
However, getting same-day merchant account approval is possible. This requires using merchants with an accelerated vetting process. You have to go through a third-party processor(payment aggregator) and you will not have your merchant account but instead, you will be aggregated into a large group of merchants.
Same-day merchant account approval is available for low-risk businesses; high-risk businesses are not excellent candidates for fast approval.
Why Would Merchants Need Instant Account Approval?
Merchants may require instant approval of their accounts due to different reasons:
- The business is new and you want to start accepting payment immediately.
- Your business is low risk and therefore should not take a long time to evaluate.
- If you want to change your merchant account provider because you are dissatisfied with the previous one.
How To Increase Your Chances For Instant Account Approval
Companies offering online merchant account instant approval are very strict in their application process. One wrong thing in your application can cause it to be canceled. To increase your chances for instant approval:
- Make sure your personal and business credit score is high.
- Make sure you provide all the relevant information and documents required in the application.
- Make sure your website is up-to-date and functional.
- Provide processing statements for the last three months.
- Do not provide any false information on your application.
- Make sure you have no history of high chargebacks.
- Your business should have no history of fraud or fraudulent dealings or transactions.
- Provide bank statements for the last three months.
Factors delaying instant merchant account approval
- High-risk business
- Poor personal or business credit score
- A high volume of transactions. Banks are usually reluctant in processing a large number of transactions, especially from online businesses.
- Businesses operating on international waters like cruise ships and fishing vessels. Operating a business outside of your country makes it harder to process transactions.
- Merchant account termination by your previous service provider.
Instant Approval And Instant Funding
Most business owners tend to think that if they get their merchant account fast, they will access their funding quickly once they start processing payments. However, that is not the case. Some merchant service providers offer same-day or next-day funding for businesses.
Same Day Funding
Same-day funding is great. To access this service, you will be required to batch out early in the day; between 10 and 11 am. Once you do that, the money will be sent to your business account on that same business day. If you batch out past 11am, the money will be sent the next day; always keep time when batching out. Before batching out on a Saturday or Sunday, check with your service provider to confirm if they make deposits during the weekend.
Next Day Funding
Next-day funding means that the sales you make today will be paid out on the next business day. When using this service, you also have to batch out before the cutoff time so that you can receive your funds the next day. The cutoff time is usually around 5pm; ensure you keep time.
Most providers operate during business days(Mondays to Fridays), but some also make deposits on Saturday and Sunday. Before batching out on a weekend, check to see whether your service provider is able to make deposits.
How To Keep Your Same Day Or Next Day Funding
It is important to keep your merchant account in good standing and avoid freezing of funds. To do this:
- Keep a steady cash flow.
- Select a service provider with fast funding.
- Minimize chargebacks
- Batch out at the appropriate time
- If possible, avoid keyed transactions
- Do not exceed your processing limits
Benefits Of A Merchant Account
- You are able to accept credit and debit card payments.
- Your customers have a convenient method of payment.
- Avoid bad checks.
- Better cash flow management.
- Increase in sales
- Receive online payment.
- Safe and secure payment processing.
- The ability to accept payment in different currencies.
- Increased security.
- Shows that your business is legitimate.
Get Instant Merchant Account Approval Now!
Do not allow delayed account approval and payment processing to interfere with your business operations. Apply for a merchant account using a service provider that best suits your needs and enjoy fast approval and fast funding.