Establishing a merchant account is already a necessity for most businesses. It provides other convenient ways for customers to make their payment, through offering merchant services. For most businesses, particularly start-ups and small businesses, setting up a merchant account is quite tedious. Whether it’s regular or high-risk merchant accounts, there are steps that we need to consider before being granted with one. This post will help you get a background of how to establish a merchant account.
High-Risk Merchant Account
We have already discussed the high-risk merchant accounts in our previous post entitled, “How to Set up a High-Risk Merchant Account for Credit Card Processing.” It focuses on high risk merchant services and high risk credit card processing. For that reason, we will only discuss the steps on how to configure a standard merchant account.
There are two methods of acquiring a merchant account, where both demand that a business enters into an agreement:
- Make a contract with a bank that offers processing relations with both Mastercard and Visa.
- Establish an agreement with a certified agent of the bank, which is either an Independent Sales Organization (ISO) or a Member Service Provider (MSP.)
These agreements mean that a business should agree to stand for the operating regulations set by the credit card brands. To help you establish a firm understanding on the processes of acquiring merchant accounts, here’s a quick step-by-step guide:
Step 1: Know how Card Payments relate with the Nature of your Business
Before deciding to establish a merchant account, it’s important that you determine how card payments relate to your business. Here are some important questions that need to be considered:
What credit card brands should you accept? Should your business take other card brands as well, other than Visa and Mastercard? You should have a list of credit cards that you accept.
What should be your approach in accepting payments? Ensure that you are prepared and ready for receiving payments to go along with your secondary options.
How much volume of sales should go through credit cards? It is essential that you have an idea about the behavior of volumes before deciding to talk to a merchant account provider.
Step 2: Choose nothing but the Best Merchant Account Providers
By now, you already have an idea of how your business will work with your merchant account. The next thing you should do is to choose the best merchant account providers. The best thing you can do is to compare both merchant account providers and determining which is the most convenient firm for you. Here are some points that you need to consider when comparing two capable merchant account providers:
- Merchant Account Transaction Fees
- The Quality of Customer Support
- Merchant Account Provider Evaluation
- The amount of customer control ensured.
- Merchant Account Provider’s array of offered payment option
- The suitability of the proposed solution
- The willingness in providing references
Step 3: Merchant Account Set-up
Since the bank that you are applying for is going to take on a risk by granting your business with merchant services, you should expect a pretty lengthy review process before your request will be approved. When choosing a merchant account provider, here are some expectations during the set-up process:
The firm will ask you to complete a detailed application form. You will then be filling up a lot of information about your business model, as well as with your finances.
For small businesses, providing personal information will be required. Go along with undergoing a credit check and providing a personal pledge on the account.
You should work with a provider that will hold your hand through underwriting. This method will ensure quicker and less confusing approval processes.
Step 4: Start Accepting Credit Card Payments
When you follow the steps above, the result will feature your business now offering credit card payments. All of your hard work will pay off once you do it the right way and trust in your decision-making. So, now that, your business is approved for a merchant account, the question would now be what next?
You’re Good To Go
Once you have successfully setup your merchant account, you can now start accepting payments via credit card. If you managed to get a capable merchant account provider, it would be as simple as logging into a software product and retrieving your customer’s payment information by clicking the collect payment button to have the client’s transaction processed and their funds deposited into your own bank account.
