If you want to accept credit or debit card payments, your business needs a merchant account. Opening a merchant account is a straightforward process, but there are still requirements that you’ll need to meet to be accepted.
Here are some important things to know about opening a merchant account.
You Will Need a Business Bank Account
Regardless of whether you’re operating as a sole proprietor, LLC, or some other entity, you will need a business bank account to open a merchant account.
Any funds that you transact will need to be sent somewhere, and that somewhere will be your bank account. Transaction fees will also be debited from your account.
Opening a business bank account is quick and straightforward. All you need is your business license and EIN (you can use your Social Security number if you’re working as a sole proprietor).
You Will Need to Submit an Application for a Merchant Account
Merchant accounts go through an underwriting process, which means that you’ll need to submit an application in order to be considered for an account.
The application will ask for information about your business, including:
- Your bank account number and routing number
- EIN or Tax ID
- Estimated processing volumes
- Authorized signer information
- Business start date
- Beneficial owner information
You may need to provide supporting documents to the underwriter, especially if your processing volumes are high. If you’re going to process larger amounts, you may need to provide more financial information, such as profit and loss statements and balance sheets.
You Should Consider PCI DSS Compliance
You may not be required to be PCI compliant prior to opening your merchant account, but you will be required to be compliant soon after. It is crucial to ensure that your payment processes are secure. PCI DSS requirements include (but are not limited to):
- Protecting cardholder data that you store
- Installing and maintaining a firewall to protect cardholder data
- Restricting access to card data
- Encrypting transmission of cardholder data on public networks
- Creating and maintaining a policy for information security for all personnel
A Merchant Account Can Be Up and Running in Just a Day
In some cases, merchant accounts need to be up and running in just one business day. How quickly your application is reviewed and approved will depend on the type of business you run, how many transactions you expect to process, and other factors.
Once your account has been approved, you can start processing transactions immediately.
You Can Use the Same Merchant Account for In-Store and Online Transactions
In many cases, you can use the same merchant account for your in-store and online transactions. This is beneficial because you won’t have to undergo two underwriting processes. If you already have a merchant account for your physical store, ask about using your account for online transactions as well.
Opening a merchant account will allow your business to accept multiple types of payments, which is convenient for your customers. The process of opening an account is straightforward, but it’s essential to keep the points above in mind when submitting an application.