How to Apply for a Merchant Account

If you have a startup business that is beginning to grow, you should consider how to apply for a merchant account so that you can accept credit & debit card payments. However, there are a few things that you need to know first before you submit your application.

Here are some helpful tips to get you started. With a bit of guidance and education, it will be very simple for you.

Whenever a business applies for a merchant account, the payment processing company as well as their banking partners are going to be taking a risk if they approve the account. Their biggest fear is over how many chargebacks there could potentially be on the account if they approve it. After all, those funds are the responsibility of the bank. They’ll lose money if there are too many chargebacks on an account. So, they want to make sure there is little chance of this happening with the merchant.

For instance, suppose a customer uses their credit card to purchase a product from a company’s website but they never receive it. Naturally, they are going to call their credit card company and file a complaint. This will result in a chargeback, which forces the partnering bank to refund the money to the buyer. The bank won’t even wait to recover the money from the merchant before issuing the refund.

Therefore, you should work with a partner that has experience if you want to avoid underwriting issues. This is no different than if you were underwriting a mortgage and asked a loan expert for assistance. In your case, IntegralPay can assist.

Here is what you will need to know about how to apply for a merchant account:

1. Business Bank Account

You cannot apply for a merchant account without having a business bank account. This will prove you have a real business, whether it’s a sole proprietorship or limited liability company. The money from your transactions will go into this business account. Try to maintain a high account balance because it will make underwriters feel better about your company’s ability to invest in its own growth and success.

2. Business License

Sole proprietorships might be able to operate without a business license in some countries. But, for most locations, a business license is a necessity to have. You will need to provide the underwriters with a copy of your business license (such as, Articles of Incorporation) so that they can review it and verify the status of your business.

3. Application

You need to fill out an application for the merchant account and then submit it to the underwriters. This involves providing your business information on the application and signing it (assuming you’re the authorized signer). It will also ask you for your banking information, contact information, business opening date, authorized signer details, estimated volume processed, and beneficial owner details.

4. Multiple Merchant Accounts for Separate Payment Types

If you want to accept ACH payments in addition to credit card payments, there are two different payment processing companies and underwriters that you’ll need to deal with. Virtually all credit cards can go through the same payment processor, but a different one is needed for ACH payments. ACH is basically an electronic check where the funds are digitally paid from the buyer’s bank account.

While filling out the application, it will ask you to list the payment types that you want to accept. After you submit the application and the required documents, IntegralPay will send them to the appropriate payment processors of these payment methods.

5. Required Documents

If you plan to deal with high volume sales, the underwriter will request additional documentation. For instance, they’ll want to see your company’s financial statements and bank statements going back anywhere from a few months to a few years. These financial statements include balance sheets, profit and loss statements, etc.

If you are approved for the merchant account, the payment processor will continue to watch your account activity very closely. Make sure you are honest with them about the sales volume or else they will come back and restrict your account.

6. Processing Fees

There are different processing fees which are based on the industry of your company, the types of processed payments it handles, and your company’s location. There are also different credit card fees which are influenced by the card itself and whether the card is present during the transaction (retail point of sale) or not (online order, telephone order). The industry and type of payment influence the funding times too.

7. PCI Compliance

Credit card companies have created a series of rules and regulations called PCI Data Security Standard, or DSS. This is what secures a customer’s payment to a merchant. Before your merchant account is open, you do not need to have PCI Compliance. But you will need PCI Compliance right after your account is open. Therefore, think about it ahead of time.

Apply for a Merchant Account Now!

IntegralPay will guide you through how to apply for a merchant account and the steps to becoming PCI compliant.

Get started with our pre-qualification form now, or contact us now for further information.