Setting up a Merchant Account for Credit Card Processing
01 November 2017
If your business is going to offer merchant services to the customers then you will first need to get approved for a merchant account so that you are able to set up credit card processing and also to accept mobile payments one day. Small businesses need to choose who they will be extending credit to. If they choose only to extend credit to those that pay in cash and checks it is easier, but then it could limit their client base, but if they choose to extend credit to their customers it gets complicated but their marketplace and customer base is expanded.
If you have a merchant service then you are able to accept credit card payments from your customers. Your bank or a specialised merchant service provider can offer merchant services. If you go through a merchant service provider then you may have the ability to buy or rent credit card processing equipment.
A merchant account is a bank account that is created by a business so that the business is able to accept payments from customers who use a credit card or a debit card. A merchant account also includes an agreement between the bank, the retailer and the payment processor for settlement of the debit and credit card transactions. As a small business you may not always be permitted a merchant account. It might then be a good idea to apply for a merchant status with your bank. The main reason though that your application for a merchant account can be rejected is because of bad credit. The banks see a merchant account as credit so your credit report needs to be good and your credit score needs to be high.
You are able to get a merchant account from a bank, but there are other routes. You are able to apply with an independent credit card processing company. These companies do accept high risk businesses. They may however, charge higher fees and you need to go over the fee structure. It is a good idea to shop around for a merchant account and get all the facts before you decide if your business will be accepting credit and debit card processes.