How to Get a Merchant Account
What is a merchant account?
A merchant account lets your business accept debit and credit card payments. Merchant accounts are established with a credit card processing company that helps connect your customer’s payment to your bank account. Businesses and processors need each other to stay in business. Without a merchant account, you cannot accept credit cards from your customers and to remain a cash only business is extremely restrictive.
There are several steps a business owner needs to take in order to establish a merchant account. Read on to learn how to get a merchant account set up for your business.
1. Establish what role a credit card is going to play within your business.
Evaluating and asking yourself certain questions about your business will help you determine how and what forms of credit card payments you should be accepting. Visa and Mastercard are standard, but should you accept other card brands, such as American Express? You’ll want to be prepared with a list of credit card brands that you want to accept. There are a variety of ways to accept payments, such as online, in person, or over the phone. Do you want to use a virtual terminal, or will a traditional terminal and point-of-sale system meet your daily needs? Do you have recurring billing needs? Examining your sales volume is an important part of the process when acquiring a merchant account. There are particular merchant service providers who offer customizable rates depending on business volume.
The merchant services industry is extremely competitive, there is a multitude of payment processing companies that specialize in certain industries and have different payment structures and transaction fees.
What is a Merchant Account Transaction Fee?
There are two common types of fees for credit cards transactions. Flat rate fees are ones that get charged for each credit card payment that is processed and a percentage fee based on the total amount of each transaction. When dealing with percentage fees most merchant account providers will use a tiered pricing system.
Other Merchant Account Fees: There can be many other fees associated with a merchant account beyond the transactional fees. Other fees to ask about include:
- Monthly minimum fees
- Setup fees
- Cancellation fees
- Statement fees
- Customer service fees
- Chargeback fees
- Batch fees
- Annual fees
Understanding all of these fees will help you as the business owner to prepare appropriately for the monthly costs associated with having a merchant account. It is important to look for a merchant service provider that has transparent yet competitive pricing plans.
3. Finding The Right Merchant Account
Some merchant account providers will work with the current system you have in place or outfit your entire business with new software solutions and hardware. For example, are virtual terminal processing, email invoicing, recurring billing, website payments and mobile payments all included in one solution, or do you have to set these up separately? Finding an all-in-one merchant services provider is the most cost effective and streamlined solution. An all-in-one merchant service provider will often be able to tailor solutions to your particular business and industry. Finding a merchant account provider that offers a strong customer support team is critical to the success of integrating a payment processing system.
Security is another big factor to consider when comparing merchant service account providers. Can your customer’s payment account data be securely stored in a manner where you will have minimal PCI compliance issues? Be sure to verify that your merchant service provider follows all PCI-compliance guidelines set forth and supplies businesses with the most up-to-date equipment such as EMV capable terminals and point-of-sale systems.
4. Merchant Account Set Up
An application process is to be expected regardless of your merchant account provider choice. You will be asked to provide information pertaining to your business model and finances such as a credit check, especially if you have a smaller business. Working with an assigned account representative can ease the process of applying for a merchant services account. An educated team member should be able to provide fast and efficient approval to get your business accepting credit card payments as quickly as possible.
5. The Last Step: Accept Credit Card Payments
So, you’ve been approved for a merchant account. Now what? Once your merchant account is established you will be ready to start accepting credit card payments. If you choose a traditional merchant account provider (and a reputable one) a technician often takes care of the setup process for your new credit card terminals, point-of-sale systems, and software integration.
Upon accepting payments money will start flowing from your customer's transactions into your businesses bank account. Investing in a merchant services account provides the flexibility your customers need to increase sales and your bottom line.