10 Things you must know about opening a credit card merchant account

10 Things You Must Know About Opening A Credit Card Merchant Account

An Introduction Want to accept debit and credit card payments in a breeze? Explore the benefits of a credit card merchant account to expand your customer base while enhancing the comfort and convenience levels for your customers and adding multiple layers of security, trust, and credibility to every online transaction.

Why do you need a Credit Card Merchant Account?

A Credit Card Merchant Account helps businesses accept debit and credit card payments to tap into the vast realm of eCommerce. It also eliminates the risk of human errors while accelerating cash flow, which helps businesses with quicker access to funds. Reputable merchant service providers implement out-of-the-box and robust security measures, including but not limited to fraud detection and state-of-the-art encryption, protecting both the business and its customers from potential cyberattacks.

1. Underwriting is required for opening a credit card merchant account Risk is undertaken by payment processors and partnering banks when they provide a credit card merchant account for businesses. For instance, let's say a business (ABC Ltd.) processes an online transaction via their credit card merchant account but they were unable to deliver the product or service because of any unforeseeable reason. The customer then makes a chargeback to force the bank to issue a refund, often before the bank has recouped the funds from the merchant.

2. A bank account is a must Before a credit card merchant account gets opened, you need to have a business bank account even if you are running a sole proprietorship business. For this, you will need a business license and employer identification number (EIN). The business bank account will be the destination by default for the funds you transact and the account where transaction fees will be debited.

3. A business license is almost always required You probably already have a business license unless you are running a sole proprietorship firm in a certain county. If you aren't already registered, you need to visit the Secretary of State’s website to do so.

4. An application for Merchant account underwriting is required An application (usually online) is required to be submitted for the merchant account underwriting process. You will need to submit your tax ID (EIN), bank account and routing numbers, and estimated processing volumes before you get started with the credit card merchant account. You may also be asked to submit details such as contact information, business start date, and authorized signer information.

5. Separate merchant accounts may be required for different types of payment acceptance If you want to accept ACH and credit card payments, you may have to go through different underwriting procedures (one for ACH payments and another for credit card payments). An extra application may not be required if you go through a software provider or independent sales organization (“ISO”).

6. Provide supporting documents to underwriters You will need to submit documentation to underwriters for opening a credit card merchant account. The list of documents may include ACH routing and account number, the registered name of your business, a voided check or bank letter, the last three merchant processing statements, the last three bank statements, your customer service phone number, terms and conditions or any legal restrictions, clear identification of the card networks you accept, profit and loss statements along with balance sheets of last two years, and your business’s country of origin.

7. Your credit card merchant account can be up in a single business day Once you have completed your credit card merchant account application, your account can be set up in a few hours or one business day. If you choose a merchant account service provider like WebPays to guide you through underwriting, you can sync the credit card merchant account to the software and immediately start processing transactions after receiving the underwriting approval.

8. You can use the same merchant account for different purposes One of the biggest advantages of a credit card merchant account is that it is transferrable between your online operation and your physical storefront as long as the platform at both locations is the same.

9. Funding times and processing times may differ Processing fees may vary depending on the payment method and the card. Also, credit card payments can land in your account as soon as 24-48 hours after the transaction while ACH transactions may take 3-5 business days to reach your account.

10. You should focus on PCI DSS compliance The Payment Card Industry Data Security Standard (PCI DSS) is a set of predefined rules and regulations that have been established by credit card companies to make sure that merchants are processing their customer payments in a secure environment. Also, you need to start following strong data protection and security measures such as implementing strong passwords, installing virus protection & allowing regular updates, and shredding documents including payment information.

Conclusion To apply for your credit card merchant account, you can simply contact WebPays – one of the most trusted names in the world of seamless and secure credit card processing.

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