Does Your Business Need a Merchant Account?

If you own or are planning to start a small business, you may have heard about merchant accounts. Many business owners are unsure exactly what these are and how to use them. A lot of people are unsure whether they need a merchant account to run their businesses. Understanding the answers to these questions could help you run your business more effectively.

What Is a Merchant Account?

A merchant account is a special type of bank account that can accept credit and debit payments. Some accounts can also or alternatively accept other payments such as mobile payment apps.

Having a merchant account is an important part of payment processing. Despite what you may expect, when you accept a credit card payment from a customer, you aren’t the only two parties involved. These are the key players involved in processing a payment:

• The Seller: This is your business. The seller initiates the transaction using the customer’s payment card.
• The Customer: This is the person trying to buy from you. They have a credit card issued by their bank.
• Payment Gateway/Processor: This is an important middleman that does a lot of the work of the processing. The processor or gateway collects the card information, does a fraud check, and sends it to the acquiring bank.
• Acquiring Bank: This is the bank that issued your business your merchant account. It handles the collection of payment and part of the authorization process.
• Issuing Bank: This is the customer’s bank. It authorizes (or not) the payment at the request of the acquiring bank.
• Card Network: This is the network that provides the card and handles the communication between banks. VISA, MasterCard, and American Express are all card networks.

How Do You Select the Right Merchant Account?

If you have decided that you need to get a merchant account, you will need to consider which is right for you. Typically, acquiring banks do not directly provide accounts. Instead, they work with merchant service providers to act as middlemen.

Think about how many transactions you expect to be processing each month in the coming year. Also, think about what the average value of the transaction may be. Similarly, you will need to plan how customers will pay you.

Therefore, it is wise to gain an understanding of Merchant Stronghold:

• Per Transaction Charges: Any action between a cardholder and a merchant or member that results in inactivity on the account, such as purchase, cash advance, or credit.
• Monthly Minimum Fees: If you do not reach this minimum, you will be required to cover the difference.
• Chargeback and Retrieval Fees: These fees only occur when a customer contacts the bank to dispute a charge.
• A Few More Features: Multiple Currencies Accepted, No Hidden Charges, No Application Fees, All cards brands accepted- visa/ master, Easy website integration, and so on.

Documents required getting a Merchant Account for your business:

Personal Documents: Driving License and Personal Bank Statements for the recent 3 months

Business Documents: Article of Incorporation, Business Bank Statements for the recent 3 months, Processing Statements for the recent 3 months, Bank Letter or Void check, EIN - IRS, and a few supporting documents based on the business type.            

If you’re looking for a merchant account for your online business you’re at the right place. Merchant Stronghold got simple solutions for your complex business.