How Do I Open a Merchant Account?

Opening merchant accounts for businesses may seem overwhelming but it's actually quite simple. Like any other business structure, merchant accounts need to follow certain regulations and protocols, although these rules vary by country and the institution you choose to open an account with. The process alone varies from one institution to another and features will vary when you compare one payment processor to another. However, opening a merchant account should not be a difficult process if you know what to do early on and have a good understanding of what you can expect during this process.

In this article, we'll walk you through the process of opening a merchant account and explain what you can expect during this process. Not all payment processors are the same—and depending on what you're selling or looking for in features, it might make sense to go with one company over another. Here are some general steps to take when considering what payment processor is the right fit for your business and your business needs.

Start your research

First, start by researching financial institutions that offer merchant accounts and comparing their features, fees, and services. Make sure you're getting all the features you need, like online payment processing and automated recurring billing or physical equipment for your brick and mortar location. Not all institutions offer the same services and it is important to know that the financial institution that you choose best fits your business needs.

Integrations are also a factor to consider when integrating your payment processor with your website or existing software. Before choosing a payment gateway software, make sure you ask if it can integrate into your existing checkout. Not all payment gateway software will be compatible with your existing checkout.

Gather necessary documents

Typically, financial institutions require various documents to open a merchant account, including your business license, tax ID number, and bank account information. This information is used to validate your business and the products or services that you sell.

Depending on what you sell, you may need to look for a specific payment processor that works with your business type. This can be a little difficult if you sell products or services that are considered "restricted" or "high-risk". For this reason, it is important to do your research and make sure that the financial institution that you choose works with your business prior to filling out their application; this will save you lots of time!

Fill out an application

Once you've gathered the necessary documents, you can typically fill out an application online or in-person. The application will ask for information about your business, such as your industry, sales volume, and expected transaction sizes. If you're a new business, it's okay to simply put in your projected volumes as you start your business. Don't worry, a lower volume is okay given you are just getting started!

If your business has been operating for some time and you are no stranger to payment processing, be honest and put in your average monthly processing volumes. Sometimes, some business owners are reluctant to put in a higher number for either their monthly processing volume or their average ticket size. If you have high volumes or high tickets, it's important you disclose this to the financial institution of your choice to help avoid any issues once you run your sales. Many business owners have heard stories about other business owners having their funds held because of high volumes or transaction sizes by another financial institution. You can avoid this headache by adding your honest volume and transaction sizes upfront.

Wait for approval

‍After submitting your application, the financial institution will review your information and either approve or deny your application. In most cases, the financial underwriter may also ask for more documentation from you and your business prior to completing their decision. If this happens to you, don't worry! This step typically means that the payment processor is willing to work with your business, but they just need some additional information to make sure that you won't have any disruptions once approved to run payments.

If you receive a follow-up request for more information, get what is needed back to your financial institution as soon as possible because by this point you are usually very close to gaining access to your new account. If approved, you'll typically receive instructions on how to set up your account and start accepting payments.

Setting up your account‍

Follow the instructions given by your financial institution on how to set up your merchant account. This may involve integrating with a payment gateway and configuring your account settings. You can ask your financial institution if there are any steps you can take beforehand to make sure any integrations go smoothly. When you choose a reliable payment provider, they should offer support to help you through the setup of your account. This could include FAQs and guides, as well as live chat support available during business hours.

Conclusion

Once you've completed these steps, you should be ready to accept payments through your merchant account! Be sure to monitor your account regularly and contact your financial institution if you have any questions or concerns. Financial institutions are a great resource for businesses, but it's important to do your research, understand what you're looking for, and make sure you work with a reputable one. If you're looking to set up a merchant account with a leading payment provider, get started now! A merchant account is the first step to expanding your business into the world of payments. For that reason, we would love to be there every step of the way. If you have questions about merchant accounts or payment providers, we'd be happy to help answer questions you may have. Opening a merchant account doesn't have to be scary. With the right team behind you, it can be a breeze.