A merchant account is an arrangement a merchant makes with a bank or other merchant account provider in order to facilitate payments with a credit or debit card. Obtaining a merchant account is a necessary step for an online store wishing to accept payments online rather than having payments mailed to them. If you have an online store and want to accept credit or debit card payments, efficiently, you will need a merchant account.
One would think obtaining a merchant account would be relatively simple, but the process can seem difficult and overwhelming if you are new to the business sector. The main reason you will need a merchant account is to have the ability to accept credit or debit cards on your online store. There are some ways to get around needing a merchant account including going through a separate payment gateway that does not require one. However, going through a payment gateway without a merchant account will cost you much more in fees and charges.
Obtaining a merchant account can take anywhere from a few days up to six months depending on which merchant account provider you go through, which paperwork is needed and if there are any mistakes made on any of the paperwork or if they are hard to verify. If you are unfamiliar with this process, you will want to start as soon as feasibly possible, especially if you go through a bank as they are notoriously slow.
You can secure a merchant account though a bank or an independent third-party. You can also get an online merchant account through the countless merchant account providers found on the Internet. There are benefits and drawbacks to each one. Banks tend to be more credible and reputable as a merchant account provider, but they also have stricter requirements for approving merchant accounts. An online merchant account has a greater risk of being victim of a scam or fraud, but if you find a good one, they typically have lower rates and fewer fees than through a bank.
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The actual process of setting up a merchant account involves filing an application for approval and submitting various required documents. The application itself is pretty standard regardless of which provider you choose. In addition to the application, you may also be required to provide business related documents such as business organization documentation, the applicant’s driver’s license or some form of identification, a voided business check and business financial documentation. The exact requirements may vary from one provider to the next.
The best way to start looking for a merchant account provider is by reviewing different pricing options between several providers. Be sure to read all the fine print and look carefully for any hidden fees that may help you avoid being scammed. The Nilson Report prints out a list of the top one hundred merchant account providers and is an excellent place to begin your search.
Having an online store pretty much demands the need for a merchant account, but getting your first one does not have to be a nightmare if you take the time to proceed thoughtfully and cautiously.