What is a Merchant Account, And How Do I Get One?
A merchant account is a type of bank account that allows businesses to accept credit and debit card payments. It is an agreement between a retailer, a merchant bank, and a payment processor for the settlement of credit card and/or debit card transactions. When a customer pays for a product or service with a credit card, the funds are first deposited into the merchant account. From there they are transferred to the retailer’s bank account, normally on a daily or weekly basis.
How do I apply for a merchant account?
To begin the process, you will want to determine the types of payments you want your business to process, and select a merchant bank and processing provider who can meet your needs, whether it is an internet merchant account provider, a more traditional merchant account provider, or both.
Keep in mind that if you are going to operate an e-commerce business and want to accept credit card payments online, you need at least one internet merchant account, even if you already have a merchant account.
Once you’ve selected a merchant bank, they will require an application process to determine your eligibility to obtain a merchant account. You will be asked to provide all relevant information to help determine your eligibility for a merchant account, including name and type of business, address, phone number, EIN (Employer Identification Number), length of time in operation, details of the business owner, and references. When making a determination for eligibility to obtain a merchant account these entities do pay close attention to the type of business, how long the business has existed, and the credit histories of business owners.
If qualified, you will receive an approval containing instructions for onboarding with your merchant bank and processing provider. Congratulations, you can now start processing payments!