In the contemporary digital age, the preference for electronic payments over conventional methods is on the rise, leading businesses to consider setting up a merchant account. This popular electronic payment service allows your business to accept and process credit and debit card transactions, thereby enhancing customer convenience. However, understanding how to set up a merchant account, especially for first-timers, can be somewhat challenging.
In this comprehensive guide, we aim to simplify the process of how to create a merchant account. By equipping yourself with this knowledge, you can collaborate with your chosen merchant service providers to select the most suitable merchant account for your business needs.
Before we explore the intricacies of setting up a merchant account, let’s first grasp the concept of what a merchant account is.
What is a Merchant Account?
A merchant account is a bank account that enables your business to accept and process card payments.
The account is an agreement between your business, a merchant bank, and the credit card payment processors to enable the settlement of debit or credit card transactions. Setting up a merchant account is important as it enables your business to not only accept payments made through credit and debit cards but to also reach more customers, meet consumer demand for electronic payment services, enhance security, and increase sales.
So, let’s learn how to create a merchant account.
How to Create a Merchant Account?
It’s time to discover how to open a merchant account now that you understand the significance of one. Hence, the process of building involves several steps, such as picking the best brands, analyzing our turnover, setting up the website appropriately, and doing additional activities like picking up the ideal merchant provider and confirming high-risk and low-risk merchant scenarios. In addition to the useful details, this part includes a comparison, video insights, and instructions for creating a merchant account and selecting the best one. Alright! So let’s jump into the other pool once more!
Choose Credit Card Brands
Preparing a list of the credit card brands you will accept will make it easy for you to choose the perfect online merchant account
provider, most probably the perfect businees partner.
The first step you have to make is to decide on the credit card brands that you’ll accept payments from. Considering there are many credit card brands, start by researching the ones that your target audience uses. For instance, do most of your customers use Visa and MasterCard? In such a case, you’ll need to open your merchant account with a financial institution that accepts these two cards.
Analyze Your Turnover
The next thing you need to do is to analyze your business turnover. Ask yourself, how much money do you make in a month or a year? How much of the business sales are from credit card payments? To answer such questions, you’ll need to have your financial statements in order. Your merchant provider will also need to analyze such records, meaning, you’ll need to have your business financial records ready.
Prepare Your Website
Prepare your website in such a way that it can accept card payments. Â
- If you plan to use an online high-risk payment gateway service provider, they will help you connect your website to your merchant account. They will also help you process the payments between the different parties involved.
- However, if you don’t intend to partner with any of the available payment service providers, you’ll have to ensure the payment process is secure and convenient for your customers.
- For instance, to gain the trust of your customers, you’ll need to include an SSL certificate or other security measures on your website. This assures your customers that the personal information they key into your site is secure.
- It’s also essential that you simplify the payment process for your customers. For instance, customers should be able to pay via the website without creating an account with your online business.
Ensure your website is also user-friendly so that customers have an easy time going through the shopping and payment process. Remember to also customize your website for mobile, as more customers are using their mobile phones to shop.
Things to Consider When Opening a Merchant Account
A few checklist commodities, such as a merchant, acquirer, card scheme, issuer, and cardholder, are reviewed during the selection process. From this, it is easy to conclude that choosing the ideal merchant account for your company involves careful consideration of both the acquirer and the issuer. However, there are a few essentials to keep in mind before opening an online or offline merchant account.
Merchant Account Providers
Before opening a merchant account, it’s crucial to compare the available providers. Focusing on this point, we’ll be providing important tips for comparison and identifying the major market players in the current scenario. Let’s dive in!
Some tips you can use to make this comparison include the following:Â
- Transaction fee – it’s important to gather all details relating to the merchant’s payment model and any other additional processing fees. This will protect you from any surprise costs after you have already signed the contract.
- Services offered – You’ll need to know if the provider offers all the services you need in addition to the merchant account. For instance, do they offer virtual terminal processing, website payments, and mobile payments?
- Customer support – Is customer support available to help you in case you’re having issues with your account? A good merchant services provider should be able to provide reliable ongoing support.
- Experience – How long has the provider been in business? Have they worked with a similar type of business in the past? Do they have good reviews online, or are they willing to provide you with references that you can contact?
Amazon Merchant: Businesses selling goods on the Amazon platform constitute the target market for Amazon Merchant accounts, accessible through registration on the Amazon Seller Central portal.
- During this process, applicants must consent to Amazon’s seller policies while furnishing necessary company and tax information.
- Once approved, sellers can leverage the Amazon platform to list products, manage inventory, and fulfil orders. This marketplace provides businesses with the opportunity to promote and sell their products to a vast customer base, benefiting from Amazon’s extensive reach
Google Merchant: Advertising on Google Shopping is linked to a Google Merchant Center account, which enables companies to display and sell goods directly on Google.
- To create a Google Merchant Center account, companies must register, submit details about their offerings, and attest to their adherence to Google’s guidelines.
- Businesses may submit product data, set up product listings, and develop Google Shopping campaigns all from one central location “the Merchant Center”. This makes their products visible to people when they search for similar things on Google, both in relevant search results and advertisements.
Difference Between Merchant Account Providers
PLATFORM FOCUS:
- Amazon Merchant: This company specializes in e-commerce and direct product sales on Amazon.com.
- Google Merchant: focuses mostly on Google Shopping and offers product listings and advertising on Google.
SALES CHANNEL:
- Amazon Merchant: Products are sold directly on the Amazon website.
- Google Merchant: Enables Google advertising and visibility, sending potential consumers to the merchant’s website so they may complete transactions.
PRODUCT LISTINGS:
- Amazon Merchant: Products are listed on the Amazon marketplace by Amazon Merchants for direct sale to Amazon customers.
- Google Merchant: Products are listed in the Google Merchant Center to be seen on Google Shopping, but the merchant’s website is where the transaction ultimately takes place.
TRANSACTION PROCESS:
- Amazon Merchant: Manages transactions in the Amazon network.
- Google Merchant: Promotes the merchant’s website to consumers to speed up transactions.
Payment Services You Want
- In addition to accepting payments to your website, you’ll need to consider whether you’ll want to use other payment options.
- For instance, do you want to accept and process payments through your mobile phone, or you’d rather use a virtual terminal? If you run a physical shop, you may also consider getting a point-of-sale terminal.Â
- The right merchant account provider should be able to provide you with solutions and resources that meet such payment needs.
However, you should list down the merchant payment options that you need so that your solution provider can get you the right payment processing equipment.
đź’ˇ Merchant Payment Meaning: If you wonder, What is merchant payment? Then the term “merchant payment” describes how companies take payments from clients for products or services. This covers payment options including credit cards, cash, and online.
Documents Required for The Application Process
- Opening a merchant account involves filling out an application form and submitting the required documents. The application details you will need to fill in include your personal information, business financial details, business name, contact info, and employer identification number (EIN).
- You should prepare the necessary information and documents needed for the merchant account application early enough to hasten its approval.
Some Documents You May Need for This Process Include:
- Business License
- Credit history records
- Articles of incorporation
- Business financial statements
- Business plan
- Forecasts
- Marketing materials
End Lines: How to Create a Merchant Account
Opening a merchant account enables you to scale your business operations. Hopefully, now you’re well-informed on what a merchant account is and how you can create one for your e-commerce business. At eMerchant Authority, we offer reliable merchant account services that are meant to take your business to the next level. To learn more about our services, don’t hesitate to contact us for a free consultation.
đź’ˇ Extra Feed: Online Merchant Account
A specific kind of bank account that enables companies to take payments online is called an online merchant account. It makes it possible for businesses to safely conduct credit card transactions and other electronic payments. Businesses usually need to apply with a payment processor or a merchant services provider to create an online merchant account.
- Providing financial data, and business details, and accepting terms and conditions are all possible steps in the application process.
- After approval, the business can begin collecting payments by integrating the payment gateway into its online platform or website.
FAQs Answering All Queries on Opening a Merchant Account
- How to open a merchant account? To open a merchant account, you need to apply with a merchant account provider, such as a bank or a third-party payment processor. You’ll need to provide information about your business, including legal documentation, financial statements, and details about your products or services.
- How to set up a merchant account? Setting up a merchant account typically involves completing an application, undergoing an underwriting process, and integrating the account with your payment processing system. You’ll need to provide details about your business, pricing, and expected transaction volume.
- How to get a merchant account? To get a merchant account, you’ll need to research and compare different providers, gather the required documentation, and complete the application process. Providers will evaluate your business based on factors like industry, credit history, and risk level.
- How to start a merchant account? To start a merchant account, you’ll need to first establish a legal business entity, obtain necessary licenses and permits, and then apply with a merchant account provider. The provider will review your application and, if approved, set up the account for you to start accepting card payments.
- How to get a merchant account? To get a merchant account, you’ll need to research and compare different providers, gather the required documentation, and complete the application process. Providers will evaluate your business based on factors like industry, credit history, and risk level.
- How to start a merchant account? To start a merchant account, you’ll need to first establish a legal business entity, obtain necessary licenses and permits, and then apply with a merchant account provider. The provider will review your application and, if approved, set up the account for you to start accepting card payments.
Additional relevant FAQs:
- What is a merchant account? A merchant account is a type of bank account that allows businesses to accept and process various types of payment cards, such as credit and debit cards, from customers.
- What are the requirements for a merchant account? Common requirements for a merchant account include a legally established business, a business license or permit, a processing history or financial statements, and good credit standing. Specific requirements may vary among providers.
- What are the fees associated with a merchant account? Typical fees for a merchant account include setup fees, monthly fees, transaction fees (e.g., a percentage of each sale plus a flat fee), statement fees, and potentially other fees like chargeback fees or early termination fees.
- How long does it take to get a merchant account? The time it takes to get a merchant account can vary, but it typically ranges from a few days to several weeks, depending on the provider’s underwriting process and the complexity of your business.
- What are the benefits of having a merchant account? Benefits of having a merchant account include the ability to accept multiple payment methods, increased credibility and professionalism, improved cash flow, and access to detailed sales data and reporting.