How to Setup a Small Business Merchant Account

Small Business Merchant Account


      A small business merchant account allows a company to accept electronic payments, such as credit cards, debit cards, and ACH. Almost every small business hoping to succeed needs this ability in today’s world. However, the process of getting a small business merchant account is not straightforward. While applying for a payment processing account may seem tricky initially, the process is simple with a bit of knowledge and expert guidance from a reputable provider. This guide will take you through the steps to create a merchant account for your small business. If you’re looking for more small business articles, check out this article about informative podcasts.

      What is a merchant account?

      Simply put, a merchant account allows a small business to accept credit and debit card payments. A company must apply with an acquiring bank to receive a merchant account and be approved for processing.

      Is a merchant account expensive? 

      We understand costs are important to small businesses. Unfortunately, a small business merchant account is not a “one and done” cost to your company. There is usually a setup or application fee and then monthly, recurring costs for the merchant account’s lifetime. Monthly costs are most often priced on the volume of payments processed through the account. There are various pricing structures for merchant services, be sure to walk through costs line by line and fully understand the terms before applying for services. Some typically fees include monthly gateway fees, per transaction and per batch fees, PCI compliance (or non-compliance) charges, discount rates, and monthly minimums. However, the cost to expect electronic payments often far outweighs the potential business revenue lost if you do not offer convenient and innovative payment options to your customers.

      What information is needed for a merchant account? 

      Setting up a small business merchant account can seem cumbersome. It’s essential to partner with a payment processor well-versed in servicing merchants with a similar business model to streamline the process and save you from pulling your hair out in frustration. The first step to applying for a merchant account is obtaining documentation about your business. Keep in mind; if you are a startup organization or do not have prior processing history, you may be required to prior more documentation than the established merchant. Standard documentation includes:

      • Employer Identification Number (IRS Form SS-4)
      • Articles of Organization
      • Voided Business Bank Account Check
      • Business Bank Statements
      • Identification for Business Owners (Passport, Driver’s License)
      • Expected Processing Volumes (Monthly Total, Average and High Single Tickets)

      Is applying for a small business merchant account difficult? 

      Determine How To Accept Payments 

      The first step is to successfully obtain a small business merchant account to figure out the payment types you want to accept and how you want to take payments. Do you want to accept both credit AND debit cards? What card brands do you need to be able to process – Visa, MasterCard. Discover and American Express are the most common? Will you be accepting payments online or maybe through software where a full integration is required? Should you accept ACH payments? Are innovative payment solutions such as IVR or pay by text important to your business? Will you be processing recurring payments?

      There are many questions to ask yourself about payment acceptance. Be sure to know the answers before speaking with a merchant service provider. Educating yourself on your business needs means you will obtain the perfect payment solution for your business once all is said and done.

      Compare Merchant Service Providers

      This step involves narrowing down providers to find the most suitable one for you. Reputable companies are transparent about the services they offer and their charges. Therefore, avoid processors that avoid your questions or offer too good to be true pricing. Not all merchant providers are considered equal, so take time here to find the provider that fits best.

      Apply for the Merchant Account

      Finally! You have your documentation ready to roll, and you’ve located the merchant provider that suits your business needs. The final step is actually to apply for a merchant account. You shouldn’t feel pressured or rushed to sign the contract – please take time to understand the terms and negotiate as needed.  Once approved, you’ll be off to the electronic payment processing races! Best of luck to you!

      In conclusion, if you have questions on this article or are looking for a small business merchant account, please reach out to Payment Savvy. Our custom payment solutions have helped businesses grow and innovate for the past ten years. We look forward to working with you!

      Jason Rabago

      Jason Rabago

      With close to two decades of experience in sales and operations, Jason never hesitates to go above and beyond to meet our client’s expectations. He is our payment solution guru and attentively listens to a prospect’s current concerns to create a custom product offering guaranteed to check every want and need off the list. Reducing risk and increasing revenue is the name of Jason’s game and he loves providing solutions that substantially affect a company’s bottom line. Looking for an insight as to how your company can operate in a more streamlined manner? Reach out to Jason either at one his regularly attended conferences or give him a ring to discuss how Payment Savvy can elevate your business’ potential.