This guide is intended to help your business understand merchant services and arm you with the information you need to make an informed decision on setting up a merchant account.
- Step 1 – What is a merchant account?
- Step 2 – What kinds of merchant accounts are available?
- Step 3 – How long does it take to set up a merchant account?
- Step 4 – What do I need to know when setting up an account?
- Step 5 – Who should I use to set up the account?
What is a merchant account? Starting with the basics, a merchant account enables your business with the ability to accept credit cards payment for provided goods and services sold. It is important to understand three fundamental principles:
- A merchant account is underwritten by a financial institution so expect to provide financial documentation pertaining to your business.
- A merchant account allows your business to accept payments via credit card.
- A merchant account is treated like a line of credit. Money received from your customers is deposited immediately into your account, however that money be charged back for up to 18 month from the original sale. This creates a line-of-credit in the eyes of the funding bank.
What kinds of merchant accounts are available? There are many different merchant accounts that are offered depending on how your business intends on accepting credit cards. The 4 major account categories are:
- A retail merchant account
- A Mail Order, Telephone order (MOTO) merchant account
- a internet merchant account
- A Point of Sale (POS) merchant account
How long does it take to set up a merchant account? A merchant account can be set up in as little as 24 hours or as long as 2 weeks. It depends on a few factors.
- Type of business
- Industry of the business
- Requested account volume
- Business Financials
What do I need to know when setting up an account? It is beneficial to understand all the rates and fees associated with the account, how they are charged and what they mean. It is also beneficial to understand that a lot of the charges associated with the account are negotiable.
Who should I use to set up the account? There are many options when selecting a provider. Be sure to weigh the benefits and cost associated with each to make the most informed decision for your business.