- 11 October, 2019
Every business, whether big or small, will need to accept credit and debit cards since many people prefer this payment method. Accepting payment cards can help your business grow, decrease paperwork, payment collection emails and double the overall transaction amount. Opening a merchant account will allow your business to accept card payments through a payment processor. This account is a contract between your business and the bank, a financial agreement that will authorize the merchant account.
A merchant account will generate new opportunities for your business. Through this account, your business will be able to reach more customers and people beyond borders. Most importantly and before making the decision of creating a merchant account, there are factors every business should consider before opening one. Every merchant account depends on the type of business that needs it. Every business type is different, which means the services that the merchant account will provide will be different for every business as well. Your business size, type, processing history, processing needs, etc. are some factors that you should take into consideration before finalizing a contract.
When banks offer a business their credit card processing services, they require them to follow certain guidelines to get their merchant account authorized. For example, as a business who wants to open up a merchant account, you will need:
The first step is to look for credit card brands that are widely accessible and used by people from most countries. MasterCard and Visa are the most popular credit card brands which are operational in more than 100 countries.
For any merchant account to be approved, it has to go through an underwriting process. This process is part of the application and takes into consideration the type of account your business is looking for. Factors that highlight your business such as credit score, credibility, credit history, history, risks, etc. are taken into account in the underwriting process.
Once you have decided on the bank where you want to open up the merchant account, the next step would be to legalize everything. The bank will be asking for documents that would show where your business stands legally in terms of tax returns and business activities. Once these documents are aligned, you just need to fill out an application form and submit it along with the documents.
The fees depend on the merchant services you will be using, but can also depend on how risky your business is. For an individual merchant account, you will be able to negotiate rates and customize merchant services.