8 things you should do if you need to open a merchant account

8 things you should do if you need to open a merchant account

The process of opening a merchant account is not too difficult but you need to take many details into consideration. From this article, you will get to know what you should do and which aspects to focus on.

If you are planning to launch a business and accept payments from your customers, you need to open a merchant account. It will save you from the necessity to rely on outdated snail mail and paper invoices. After you apply for a merchant account, you should be able to start processing payments within 28 hours — the exact waiting time will depend on your provider. From this article, you will get to know what you need to do to open a merchant account and what you should pay special attention to.

Get a Business License

You might not need it only in case you work as a self-employed individual. Otherwise, you will need the license not only to open a merchant account but also for many other business operations. For instance, when you will be carrying out financial transactions with your merchant account, underwriters will expect to receive a copy of your license to validate the legitimacy of your business.

Get a Business Account

You will need it to receive the collected funds, even if you are a self-employed person. To set it up, you should visit the nearest brick-and-mortar branch of your bank. By the way, bank representatives will ask you to show them your business license. This account will become the default destination for all the money that you collect via your merchant transactions. All the fees that you need to pay will be deducted from this account.

Decide Whether You Need One or Multiple Merchant Accounts

If you have an offline and an online shop, it should be enough to open just one merchant account. But if you are planning to use multiple payment systems, you will need several merchant accounts. When you will be applying for opening an account, the provider will ask you to indicate the types of payment that you are planning to work with. Please select all the options that you might be potentially interested in. Sometimes, you might need to submit several applications and create several accounts. Otherwise, you might need to work with multiple providers. If you need to accept only debit or credit card payments, that would be the easiest case and you will need only one account.

Compare Funding Times and Processing Fees of Different Payment Types

Fees might vary from one credit provider to another. They might also depend on whether or not the card is actually present at the point of sale. E-check processors might charge you a flat rate while credit card processors might add a percentage fee to their flat rate. As for the funding times, you might need to wait up to 48 hours if your clients pay with a credit card — and up to 5 working days if they opt for e-checks.

Make Sure That the Provider Is Ready to Work with Your Type of Business

All businesses can be classified into two categories: low-risk and high-risk. Your company belongs to the former category if you, for instance, run a cafe or sell children’s toys. The list of high-risk sectors might vary from one provider to another — typically, it includes such categories as transportation, dating, gambling, and so on. Some providers do not work with high-risk businesses at all and others charge higher fees for them.

Consider Working with Underwriting

When payment processors open merchant accounts for businesses, this involves certain risks. It might happen so that a client pays for a product but the vendor fails to deliver it. In this case, the payment processor needs to send the money back to the customer. They might need to do it before they have recouped the funds from the merchant.

Before a provider opens an account for a business, it assesses the risks that it might involve, the possibility of chargebacks, and the legitimacy of the business. Some merchant account providers help new merchants set up their accounts and even create dedicated departments for that. To ensure a smooth underwriting process, you might consider working with an experienced partner who would consult you.

Provide Financial Information About Your Business

Your provider needs to understand how much you will be processing each month. The greater the amount of funds you need to deal with, the more documentation the underwriter will want to see with your application. The minimum package of documents includes a voided check and marketing material that will prove that you are actively conducting business. Plus, you might need to present several months’ bank statements in the form of profit and loss statements as well as balance sheets.

After the provider approves your account, it will monitor your financial activities. This is why you should be very accurate when submitting the documents. At the early stages of your collaboration with the provider, it is especially important to avoid exceeding your processing limits.

Make Your Company PCI Compliant

The PCI Data Security Standard (DDS) is a set of rules and regulations that were established by credit card companies to make sure that merchants are securely processing their clients’ payments. You might not need to prove your PCI compliance when you apply for opening a merchant account. But you will definitely need it later when you start processing transactions. Shred documents that contain your clients’ card numbers. Install antiviruses and anti-phishing software on all your computers. Make sure you store your customers’ user IDs and passwords securely.


Hopefully, this article came in handy and now you know what to do to get a merchant ID and what you should pay primary attention to. Get a business license and a business account. Select a reliable provider that offers favorable conditions and make sure it works with companies from your industry. Decide whether you need one or multiple merchant accounts and prove with the documents which amount of money you are going to process. Consider working with underwriting and make your company PCI compliant. That might seem like a lot of things to do — but you should cope with it rather quickly.

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