A Merchant account permits your business to acknowledge credit card payments via debit or credit cards. It acts as an arrangement between the payment processor (for credit and/or debit card transactions), a merchant bank, and the retailer.
To obtain a merchant account, you will need to have some of the following requirements depending on the provider:
- Checking account
- Copy of voided check
- Web site (if you prefer a real-time payment processing)
- Photocopy of recent tax returns (depending on monthly sales volume)
- Photocopy of your driver’s license (if you’re the only proprietor and if you don’t have a business license)
- Return policy information (the provider will need to know this even if it is “no refunds”)
- Trade reference (this is applicable for higher risk accounts)
Aside from that, it is also better to have good records on your business bank account because it is where obtaining a merchant account is based.
You should be able to understand some factors and answer certain questions before having a merchant account:
1. Merchant services
It is a special account bonded to the credit card processor that directs the payment into your bank. It enables you to have a transaction from the customer’s bank to your bank.
2. Merchant service account provider
This is the company that offers payment processing. It should be a reputable bank or a trust worthy company. Be sure that it never had any record of unethical business practice in the previous times.
3. How much are the charges involved for a merchant account?
You should be aware of how much will the charges be per transaction. Know if there are set up or maintenance fees required, minimum monthly sales revenue requirement, and if there are penalties involved. Most importantly, you should review the entire content of terms and agreement to ensure that there will be no hidden costs at all.
4. What are the procedures in cancelling the service?
You have to know what the steps are. It may not be required but still, you need to know how things should go when worse comes to worst.
5. Requirements to start online payment processing:
- Secure server with certification
- Order form
- Gateway
- Shopping cart
- Merchant service account
6. Other ways to accept credit card payments
- Outsourcing to a third party – it allows the third party to gather your customer’s information and process payments for your business.
- Deferred payment processing – it is the way of collecting payments via web.
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