Credit card processing can be a confusing subject. Before you jump in with both feet lets give you an introduction; What merchant accounts are, what information is needed to obtain your merchant account and rates/fees involved. 

What is a Merchant Account?

A merchant account is a special account that is setup for a business to accept and process credit card orders.  After processing a customers credit card the transaction goes through a series of complex stages.  The money transferred through the merchant account is then deposited into the business’s checking account within 2 to 3 business days. 

Requirements for a Merchant Account

Getting important information together ahead of time will ensure that you breeze right through your merchant account application process.  Here’s what you may or may not (depending on the provider) need in order to obtain your merchant account:

  Checking account (some providers set you up with one but most require that you have one already.  If you’re a Sole Proprietor you may usually use your personal checking account, however if you’re an LLC or Corporation you may need a business checking account)

  A copy of a voided check (if you use your own checking account for funds to be deposited in)  Articles of incorporation, business license or reseller license. – only if applicable(A ‘Certificate of Assumed Name’ from your county Register of Deeds office may be all that is required. These only cost around $8.)  The purpose of this is to prove you are a legitimate business. 

  Pictures of business office and location – usually only if you’re high risk – (this extra step can save you money in credit card processing costs).  If you are not considered high risk when you apply this is typically not neededmerchant requirement checkmarkHave a web site (if you want real-time online processing).  If you are not an online business you will not need a website

merchant requirement checkmarkReturn policy information (even if it’s “no refunds” a provider will need to know this).

merchant requirement checkmarkHigher risk accounts may need to Provide trade referencesmerchant requirement checkmarkPhotocopy of recent tax returns may also be needed for higher risk accounts (may or may not be needed depending on monthly sales volume you expect through your merchant account)

merchant requirement checkmarkA photocopy of your drivers license may only be required if you’re a Sole Proprietor that doesn’t have a business license.

Explanation of Credit Card Processing Solutions

In order to process credit and debit cards through your merchant account, you need to decide which processing solution is right for you. 

Retail Swipe Terminal – This particular solution is for retail and storefront merchants who see their customers face-to-face.  This type of solution incurs the lowest merchant account processing fees since you actually are able to swipe the customers credit card through the terminal.  It is believed that orders that are swiped have a lower fraud risk, hence the reason for the lower processing fees.  Check out our Complete Guide to Retail Merchant Accounts & POS Swipe Terminals.

Real-Time Processing – This is the solution for businesses on the Internet.  Real-Time allows you to automatically process credit card orders through your merchant account with no assistance needed on your end.  Everything is automated, and the funds transferred into the merchant account, from the cardholder, is deposited into your business checking account, within a few days.  All Real-Time solutions are secure and the purchase of a secure certificate is not usually required. Get more information on a real-time internet merchant account.

Virtual Terminal – If you are a merchant on the Internet and expect to receive orders via phone, fax or mail then getting a Virtual Terminal solution (along with a Real-Time processing solution) is the best route to go.  The Virtual Terminal is a secure website where you login and manually type in a customers credit card information.  Once the information is submitted, it is securely processed and funds are then deposited into your merchant account within a few days.  A Virtual Terminal can be accessed securely from any computer connected to the Internet.  Most all Real-Time processing solutions also come with a Virtual Terminal at little or no additional cost.  Virtual Terminals can also double as good mobile processing solutions, click here for more information.

Wireless Merchant Solutions – There are two types of mobile solutions, solutions that allow you to swipe a credit card in a mobile environment and Touch-Tone solutions that allow you to manually enter card information into a touch-tone phone. The  Touch-Tone solutions are usually good for smaller mobile merchants that want to process credit cards in a mobile environment without high startup costs.  The wireless swipe terminal solutions are great for merchants that don’t mind purchasing the terminal up front (purchasing is usually better than free terminal options as often times free terminals come with hefty termination fees).  Both the touch-tone and wireless swipe solutions have benefits, it really depends on your business needs in the area of credit card acceptance.  Find out more about available wireless merchant account options