Many people are there, whose business is growing and they have become sick and tired of the paper invoice and slow mail for collecting payments. Then, it’s high time you open a merchant account and accept payments through a credit card. Therefore, before you apply for a merchants account, you should know a few things.
Opening a Merchant Account? Underwriting is Must –
Payment processing and the banks with which they are partners take a risk of a certain level by providing merchants account for business. Every money that is transacted through their system, can be charged back, leaving the banks liable for the funds.
For example, your business processes a transaction through the merchant account but is not able to provide the goods or services for whatever reasons. And, if the customer issues a chargeback, then the bank is fully liable to issue a refund to the customer before they have recovered those funds from the merchant.
So, there are risks with the new accounts and the banks will look into such possibilities of chargebacks including the legitimacy of your business. So, in order to safeguard even the underwriting process, you should work with an experienced partner. Just like a loan expert helping you with a mortgage.
Business Bank Account is Must –
Whether your business is into proprietorship or sole one, you will need a business bank account, prior to opening a merchant account. It hardly takes 15 minutes to open an account at the local branch. All you will need is a business license and EIN number or social security number if you are a sole proprietor with no employees. If you don’t have an EIN number, then you can visit the IRS website. In this, your business bank account will be the default address for the funds to get transferred into your accounts, in which the transaction fees will be debited. It is also important that you keep more than sufficient balance in the account, for payment processing fees monthly software fees, etc.
Business License is Must –
Unless you are a sole proprietor, you do have a business license. This can be anything ranging from the name statement to AOI or AOA. You will require a license for opening a merchant account. So, you need to register for the same and visit the secretary of state’s website for the same. You will need a merchant account underwriter’s review and a copy of your license for the same.
Plus, you will have to enter into a merchant account agreement with certain terms and conditions like established fee structure with a network of credit card processing, banks charging per transaction cost, bank’s card processing network any monthly or annual fees, etc.
In Merchant Account Underwriting Application is needed –
In this, there is an application that businesses are required to submit. The online version of the application is available so that you do not have to hassle around with mail or fax. Apart from that, a separate merchant account is required for different types of payment acceptance, supporting documents are also required to the underwriter, PCI compliance should be there in your locater.