A debit card and credit card payment system is now a top priority for any business focused on improving its customer experience. After all, the majority of customers now prefer using card payments. Therefore, if you are not accommodating these customers, then you are losing on major sales. You should not be surprised if these customers switch to your competitors that are accepting card payments. You need to have several things to start accepting card payments. Above all, you need the hardware, software, and a merchant account for the system to work. This post explains the requirements you should have to process a card payment.
A merchant account
It’s worth noting that a merchant account is simply an account that your business creates so that your payment processor can deposit money. Once the customer transactions are processed, these funds are then sent to your merchant account.
Ideally, a merchant account can hold money that your business makes after selling your services or products. These funds can be held in the account between one and three business days while processing the payments. During this period, your merchant service provider can transfer these funds to your business account. Remember that the service providers do this in good faith. This is because they consider that the transaction will go through and be valid. They also believe that the card issuer may send the funds.
In most cases, the money that they deposit into your merchant account can attract processing fees deducted. Some of these processing fees include markup and interchange fees, so you may not get the whole amount indicated in the transaction.
As you can see, there is a certain level of risk that merchant account providers take during high risk credit card processing. Therefore, they need to be careful when it comes to dealing with merchants. They can do due diligence and even screen you to reduce these risks.
Most banks consider a merchant account as one type of credit. Hence, they ensure that there cannot be a loss when they process a debit card or a credit card. If you own a business and intend to have a merchant account, then you have to prove that you operate a legitimate business. You also need to demonstrate that you have good credit and the customer transactions are successful.
Merchant account requirements
When you decide to get a merchant account, the process can include submitting specific requirements. Remember that each merchant account provider has its requirements. For example, some of them can request for upfront fees and specific types of documentation. Some of these requirements include the following things:
Business bank account
The first thing you need to do when doing business is to separate business and personal expenses. This demonstrates that you take your business seriously and it can also minimize your liability. Even better, it can sometimes protect your company when there are financial probles.
One of the requirements for getting a merchant account is for you to provide a business account and bank statements. You can get these financial statements from your bank.
You should also consider choosing a bank that meets your business needs. For example, if you expect to get a loan in the future, then it makes sense to deal with a bank that gives loans to businesses. If you have many employees, then a bank offering payroll services can be a good option.
When it comes to the requirements for a merchant account, you need to make sure that you have enough money in the business account. Low balances and overdraws can be a good sign that you are a risk to deal with.
Financial statements
To make it easier to get a merchant account, you also have to give the merchant service provider bank statements to demonstrate the competence you have in finance. In most cases, some merchant service providers can ask you to provide bank statements that run for two years back. In other words, some merchant service providers will ask for business bank account details like routine numbers that you use to deposit money.
Besides the business bank statements, a merchant service provider can also ask for processing statements. This can demonstrate how much you usually process and other important details about these transactions. The banks do this to uncover fraud risks.
Apart from giving these bank statements, there are also good chances that a bank can require you to give personal statements. Keep in mind that some merchant account providers usually want to know if they can trust you and your business.
Other merchant account providers may also do credit checks. This allows them to see if you have good credit and to ensure that you are not a high-risk liability. Therefore, they can check your background for fraud. If you run a business that experiences lots of fraud issues, they can consider you to be a high risk, so make sure that you prevent fraud in your company.
Business license and physical address
A business license may not be a requirement for some businesses, but some merchant account providers can want you to provide it. This can include a sales tax registration, general business license, worker’s compensation, professional license, and many more. To find out the specific needs of the business requirements, you should consult a particular merchant account provider and even local regulations.
A physical address is also another requirement for a merchant account application. This is the same address where they can mail the forms. If you run a physical shop, this should be the location of the shop.
Lastly, you should remember that you need to improve your site’s SERP rankings and provide a completed application to have a merchant account. The application can indicate some of the steps you need to take and the required documents you need to include.
And, while filling out the application, make sure that you check all the details you enter carefully. Hence, to avoid making some errors, consider asking your friend to review the application before you decide to submit it.
