How To Get A Merchant Account for Small Businesses

How To Get A Merchant Account for Small Businesses

Small businesses have their own needs for accepting payment for services and merchandise. In learning how to get a merchant account, they may solve those problems. These accounts help a small business person accept debit and credit cards for payment. Not being able to accept debit and credit cards can limit a person’s ability to do business and grow their company. There is a four step process to follow when attempting to get a merchant account set up.

merchant account small business

 Required Agreements for a Merchant Account

The merchant must enter into an agreement with a member bank that has a credit card processing agreement with credit card companies or with the credit card processing company itself. These agreements obligate the merchant to abide by all the operating rules the credit brands have established. The merchant also is agreeing to pay the fees the processing company charges. It is important to understand all the terminology and rules for each different credit card brand and processor.

Step One Is Determining Credit Card Payment Needs

  • The business person should decide what type of credit card brands to accept and make a list. For instance, American Express has higher costs for merchants.
  • How will the business accept payments? A primary payment method and secondary payment methods should be determined in advance. People can pay directly to a merchant’s website, get payments processed on the business cell phone, or the merchant can use a credit card processing company. Learn what methods are possible with each company.
  • Decide how much total sales volume the company has per month and how much of it will be on credit cards. The merchant account provider may have different charges based on monthly volume.

Step Two Involves Comparison Of Providers

  • Compare merchant account transaction costs including merchant transaction fees such as the flat rate for each payment and the percentage fees based on transaction amounts. The percentage rates can be different with variables including the monthly volume of sales, the payment method, whether the card is present at transaction time, and if the credit card is a rewards card. This can add costs each month.
  • Check for these additional fees including setup fees, monthly minimum fees, batch fees, statement fees, cancellation fees, customer service fees, and chargeback fees. Many merchants have been badly burned by large cancellation fees.
  • What To Look For In Addition To Fees. Do the providers provide all the software, payment acceptance options, and equipment needed to process credit card payments? Does a company have enough control over their customer payment experience? Does the overall credit card solution fit well with a business and is it easy for employees to use? Is there adequate customer support? Is customer information stored in a secure manner? Will the merchant account company be willing to give the business references or case studies to back up their claims?

The answers to all of the above questions and considerations are very important to know before deciding on the best credit card and merchant account provider. No one wants to find out that their monthly credit processing costs are a lot higher than they expected. When a merchant wants to change providers and is told about a large cancellation charge from the existing company, it can be an expensive surprise.

Step Three Involves A Comprehensive Review

  • The member bank or credit card processor is taking a risk by processing a company’s credit card sales, so they may use an extensive review process to investigate a company before they approve it for a merchant account.
  • For the company to be approved, the merchant account company will demand an in-depth application to be filled out. It may require a lot of both business and personal information be provided. The business owner may also be required to undergo a credit check and even provide a personal guarantee on the account. This process can be difficult and confusing, so only deal with companies that have account representatives who will guide one through this underwriting process to make the approval process less confusing and go faster.

Step Four Is Approval and Accepting Credit Card Payments

  • This is what happens once a company has been approved
  • Once a merchant is approved, their account needs to be set up. Setting up the merchant account is the time to tailor it to the company needs. Here is where the merchant chooses the cards to accept and the forms of payment to be used.
  • Once the account is set up, the business owner and their employees should be trained in accepting credit payments correctly. The merchant will enter their customer’s payment information and click the payment button to have their transaction processed. At this point, funds are deposited into the merchant bank account. The amount deposited will be less all fees and costs to the processor.

merchant account requirements


There are some companies such as PaySimple that will give merchants a 14-day free trial. This is a convenient way to check out the credit card processing company and if it is a good fit for one’s company credit processing needs. Getting the perfect solution for processing credit card payments is important to every business. The days of cash-only sales are ending as young customers become more accustomed to paying with their cellphones or credit cards and carrying little cash. Many merchants are wary of accepting personal bank checks without a way of knowing if they are backed by adequate funds. Knowing how to get a merchant account is important. For more credit processing information, visit the website.