Things You Need To Know About Opening A Merchant Account

By Author: Roger Milne
Total Articles: 11
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Today, cash and checks are taking a backseat, and online payments via credit and debit cards are taking predominance. This makes it imperative for businesses to have merchant accounts for a safe and secure transaction. Via this unique account and its account number, the holder can accept payment in multiple ways which adds value to your business and allows you to expand it to new dimensions. Today, you can even have online merchant accounts. However, these accounts have different fees which can be either implemented as a monthly billing or as some fixed percentage per transaction. In case you have not opened any merchant account yet and are looking forward to opening one, you must know all about its procedure, time is taken as well as paperwork. To give you more clarity, we outline few things that you should know about opening a merchant account.

Underwriting is necessary and simple after some guidance

Both banks and payment processors take a certain amount of risks by providing merchant account to its holders. Every bit of money transacted through the system can be charged back which would leave the banks responsible ...
... for the funds. For instance, after a business transaction, the business house for any reason did not deliver the goods or services to the customer, who in turn, issues a chargeback. Here, the bank first refunds the amount often before recouping it from the business house.
Thus, any bank needs to assess the risks associated with new accounts, the possibility of chargebacks as well as the legitimacy of the business. If you wish for the underwriting process to go smooth, it’s best to work with an experienced partner. Few authentic merchant account providers have a specific department to assist in setting up new accounts for the clients.

A business bank account is needed

A business account is a must before you can open a merchant account. This can be opened in less than 15 minutes as one just requires a business license and employer identification number which can be instantly received on visiting the IRS website. This business account is necessary as it would be the default destination for all your finds transaction as well as the account from which the transaction fees will be deducted. This account must always have amount large enough to cover all deductions.

A business license is often necessary

Barring a sole proprietorship in certain countries, a business license is almost always required. A license is also required for various other purposes apart from opening a merchant account. However, for the account, the underwriters tend to review and store a copy of the license for your business validation.

Application is the first step which can even be done online

You must first apply for an account which can even be done online. This saves any hassle of FAX or mail. The business owner can simply sign online with no need to print, scan or fax. While applying, you need to furnish information about your business as well as the authorized signer of the account. You even have to provide your bank account information, routing number, taxation ID, and even estimated processing volume. Various other information and details are also required which you must fill correctly.

Different types of payment acceptance may require separate merchant accounts

Different payment methods have different underwriting procedures. For instance, credit card procedure varies from ACH payments. Thus while all credit cards can go through one processor, the ACH/e-check would require another processor. However, it may not require separate application if applied through an independent sales organization or via a software provider. While applying, you need to select the types of payments that you would be accepting. You must correctly read and follow the terms and conditions of each applicable processor and then submit the application correctly along with a copy of the voided check. You must always supply the right documentation because even after you get approved, you account’s activity would be monitored initially by the processor.

Working from northwest England since 2011, 'Independent Merchant Services' was formed with the idea to eliminate the frustration of all; looking for a reliable and authentic merchant accounts and services provider. Giving you the best advice, the company aims to help you land the best deal which helps you make a significant cut in your expenditure. Contact them for their free services today.