Merchant Account Introduction

Merchant Account Introduction

Credit card processing can be a confusing subject. Before you jump in with both feet lets give you an introduction; What merchant accounts are, what information is needed to obtain your merchant account and rates/fees involved.

What is a Merchant Account?

A merchant account is a special account that is setup for a business to accept and process credit card orders.  After processing a customers credit card the transaction goes through a series of complex stages.  The money transferred through the merchant account is then deposited into the business’s checking account within 2 to 3 business days.

Requirements for a Merchant Account

Getting important information together ahead of time will ensure that you breeze right through your merchant account application process.  Here’s what you may or may not (depending on the provider) need in order to obtain your merchant account:

Business checking account (some providers set you up with one)

A copy of a voided check (if you use your own business checking account for funds to be deposited in)

Articles of incorporation, business license or reseller license. (A ‘Certificate of Assumed Name’ from your county Register of Deeds office may be all that is required. These only cost around $8.)  The purpose of this is to prove you are a legitimate business.

Pictures of business office and location (this extra step can save you money in credit card processing costs)

Have a web site (if you want real-time processing)

Photocopy of your return policy information

Provide trade references

Photocopy of recent tax returns (may or may not be needed depending on monthly sales volume you expect through your merchant account)

Site inspection (have a photographer come in and take pictures of your inventory). Only a handful of providers still require this.

A photocopy of your drivers license

Explanation of Credit Card Processing Solutions

In order to process credit and debit cards through your merchant account, you need to decide which processing solution is right for you.

Retail Swipe Terminal – This particular solution is for retail and storefront merchants who see their customers face-to-face.  This type of solution incurs the lowest merchant account processing fees since you actually are able to swipe the customers credit card through the terminal.  It is believed that orders that are swiped have a lower fraud risk, hence the reason for the lower processing fees.

Real-Time Processing – This is the solution for businesses on the Internet.  Real-Time allows you to automatically process credit card orders through your merchant account with no assistance needed on your end.  Everything is automated, and the funds transferred into the merchant account, from the cardholder, is deposited into your business checking account, within a few days.  All Real-Time solutions are secure and the purchase of a secure certificate is not usually required.

Virtual Terminal – If you are a merchant on the Internet and expect to receive orders via phone, fax or mail then getting a Virtual Terminal solution (along with a Real-Time processing solution) is the best route to go.  The Virtual Terminal is a secure website where you login and manually type in a customers credit card information.  Once the information is submitted, it is securely processed and funds are then deposited into your merchant account within a few days.  A Virtual Terminal can be accessed securely from any computer connected to the Internet.  Most all Real-Time processing solutions also come with a Virtual Terminal at little or no additional cost.  Virtual Terminals can also double as good mobile processing solutions.