If you’re a small business owner looking to expand your payment options, you need a merchant account. This guide will show you how to open a merchant account.
Are you a small business owner who still isn’t accepting credit cards for one reason or another? You should think long and hard about trying to change this ASAP.
Not accepting credit cards could be punishing your bottom line. You may potentially be missing out on making thousands of extra dollars each year simply because you don’t offer a credit card payment processing option.
It would be worth learning how to open a merchant account so that you can start to take credit cards from now on. It’s so simple to create a merchant account for a small business by taking just a handful of steps.
Take a look at the steps you’ll want to take when opening a merchant account below.
Secure a Business License
Before you even think about trying to learn how to open a merchant account, you’ll need to get your hands on a business license. It’ll be an absolute necessity if you’re going to begin processing credit card payments.
It might take you some time to get this business license depending on where your small business is located. So you should try to work on this part of things as soon as you can to avoid any unnecessary delays.
Set Up a Business Bank Account
Once you have a business license in your hands, the next thing you’ll need to do to open a merchant account is sign up for a business bank account. It’s another absolute must for any small business owner who wants to process credit card payments.
The company that provides you with a merchant account is going to deposit your credit card sales into your account. They’re also going to withdraw fees from it based on the sales you make.
You should search for the right bank to set you up with a business account. You’re going to be moving a lot of money through it, so a local bank that you trust to provide you with personalized service might work best.
Consider Your Needs
While you’re tying up loose ends behind-the-scenes and getting everything in order when it comes to your business license and business bank account, you should also be thinking about your needs with regard to credit card payments. Here are the few questions to ask yourself:
- How are you going to accept credit card payments—only in stores, only online, or a combination of both?
- Which types of credit cards do you want to accept?
- Will you set any spending limits tied to credit card payments?
You’re going to be choosing a company that can handle your credit card payments and process them next. For this reason, you’ll want to know what you’re going to need from them so that you can find a provider that’ll check all the right boxes.
Compare Merchant Account Providers
When you think you’re ready to get serious about accepting credit cards, you can start comparing merchant account providers.
As you compare providers, you should look at things like experience, location, reputation, cost, and customer support. You’ll also want to get a feel for how long providers take to dish out payments, whether or not providers make clients sign contracts, and how PCI compliant providers are.
Your goal should be to get to know as many merchant account providers as you can. By doing this, you’ll be able to select the one that you believe will suit your business best.
If you happen to have what would be considered a high-risk business that you need to find a merchant account provider for, you’ll want to hone in on those that specialize in helping businesses like yours. For example, those who own adult sites or strip clubs will want to go in this direction.
Discover more about adult merchant accounts and how they differ from regular merchant accounts.
Fill Out an Application
When you get to this point, you should know which merchant account provider you like the most. Go ahead and fill out an application through them to try to get approved for a merchant account.
While you’re working your way through this application, you’ll need to provide things like the start date for your business, your business tax ID, your business banking information, and an estimate of how much money you plan to process through a provider each month.
Go Through the Underwriting Process
A merchant account provider is going to be assuming some risk on their end by accepting you as a client. It’s why they’re going to want to put you through the underwriting process before they even think about approving your business for a merchant account.
During this underwriting process, a provider will look through all your financial records to make sure everything seems legit. They’ll search for any signs of fraud or any other red flags that might make them concerned about doing business with you.
Find Out If You’re Approved
At the end of all this, the only thing left to do will be to sit back and see if you’re approved for a merchant account. If you are, you’ll then be free to start taking credit card payments from your customers.
Your provider will be able to deliver information on how their credit card payment processing will work and what you’ll need to do to stay in their good graces moving forward.
Figuring Out How to Open a Merchant Account Is Easy
Some small business owners don’t ever get around to accepting credit card payments simply because they’re under the impression it’s going to be too tough to start doing it. But as you’ve seen, learning how to open a merchant account is simple.
Take each of the steps listed here to inch your way closer to getting a merchant account. It’ll change the way your small business does business forever.
Get more tips on running your business by browsing through some of our other blog articles.