The Process of Getting a Merchant Account as a Startup

If you are a budding entrepreneur ready to make your business venture a reality, one of the first things you'll need to focus on is getting your own merchant account. It may sound daunting, but it doesn't have to be. This article will explain The Process of Getting a Merchant Account as a Startup!

The process of getting a merchant account as a startup doesn't have to be confusing or intimidating. You'll simply need to know what options are available and where you should pursue them, so read on to find out exactly which process you should follow!

A merchant account is an arrangement between a business and a bank or credit card company. Stores use this type of account to enable them to accept credit card payments. The business will have one or more merchant accounts with a single credit card processor. Still, they can also have several different cards through different processors or none at all, depending on their preferences.

Types of merchant accounts

There are two types of merchant accounts: 

• Surcharge accounts and 
• Chargeback accounts. 

The first is a method used when the customer wishes to pay for the service through the bank's payroll or direct debit capability. On the other hand, the chargeback account is used when the customer wishes to pay for it directly with cash or through a debit card transaction.

Process of Getting a Merchant Account as a Startup!

If you're getting started with your business or want to switch from an established company to a startup, ensuring that you can accept payments might be one of the most daunting tasks. Even if your business is in a specific niche market where credit cards aren't commonly used - i.e., if it's using alternative payment methods like PayPal and Bitcoin - acquiring a merchant account may still be necessary for your company to grow.

If you want to accept payment from merchants through your website, you need to apply for a merchant account. Here are a few things to keep in mind when using a merchant account so that the process goes smoothly.

Things to keep in mind when applying for a merchant account

There are a few things to keep in mind when applying for a merchant account so that the process goes smoothly.

Do your research.

Before you apply for a merchant account, you must do your research to ensure that your business is eligible for a merchant account.

Be prepared to send copies of all necessary documentation.

It includes forms, contracts, copies of banking statements, and more. There is no way to make an educated guess at what the various steps will be like to get approved once you submit your application with the bank or payment processor. Count on having to send copies and documents for review.

It's important to know whether or not you'll need a merchant account in advance so that you aren't caught off guard and find yourself scrambling for information once the process is underway.

The application process does not all happen at once.

You may not receive your decision immediately after submitting your application with the bank, but don't expect an immediate decision. It may take weeks, depending on the availability of your funding sources and other factors beyond your control, such as when the financial service provider's headquarters are located and how long it takes them to process applications from various parts of the world. 

Fees and costs.

Fees can vary dramatically depending on the company or even which department of the company you're working with. Get this information so that you're not caught off guard with extra costs once you've gone through the process.

Be sure that your business is well-established enough to receive a merchant account before applying for one.

You'll need to be able to support the business for at least six months before applying for a merchant account, which will require adequate funding. It isn't a primary concern if your startup is still in the early stages.

Wait before the funds are released.

Once approved, there is usually some waiting period before the funds are released back to you so that your business can verify that it's being used following their intended purpose. Some providers require a minimum threshold before extending credit from the funds in the business account.

Have a clear idea of what you're selling

Be sure to have a clear idea of what you're selling and whether or not your product or service is on the list of approved products that you're allowed to sell with your merchant account before going through the process. Many companies interested in enabling you to use their services will also need some description and picture of your product or service.

Getting a Merchant Account in 7 steps

Starting a business can be exciting, but running your business can sometimes be more daunting. This guide will help you get your merchant account up and running in no time!

As with any new endeavor, you are getting a merchant account can seem overwhelming enough unless you're aware of the process and take the time to do it right.

Follow the steps and a few tools; you'll be on your way to having that merchant account in no time. So what are you waiting for? Get moving!

Obtain your Business License.

The initial step in obtaining a merchant account is to get your business license. It can be done online at your local city hall for as little as $50. The license is easy to apply for, and in most cases, you will have it by the next day. Make sure that you fill out all of the appropriate information. Some of the information will be needed to complete the application process for your merchant account.

Register your Business Name and Obtain a DBA Name if Needed.

As with any business, you must register your company before you can apply for a merchant account. It can be done at your local county clerk's office or online through LegalZoom and RocketLawyer. Be sure to register your business name as soon as possible; you will also need this to apply for your merchant account. Both LegalZoom and RocketLawyer offer services to set up a DBA, or "Doing Business As," for an additional fee.

If you are set on using one of these services, it is best to do so initially. When researching a merchant account, most credit card processors will prefer to see that you have registered a business name rather than doing so after your credit application has been processed.

Get Your EIN (Employer Identification Number).

An Employer Identification Number (EIN) is the same as a Social Security Number for a business. It is used to track when a company has to pay taxes and other financial requirements. You need to apply for one through the IRS if you've never had one before. To do so, submit your application online and follow the instructions.

Add Terms of Service and Refund Policies.

Once you've gotten your merchant account, you will want to ensure that your business is being represented in the best possible way. When a customer signs up for a product or service from your company, they also agree to terms of use and refund policies, among other information. Although it is not legally binding in all cases, having this type of protected content on your website is the best way to ensure customers know what they are getting themselves into when they sign up for one of your services. It is also helpful if you ever have a customer dispute over the Internet or phone.

Set Up Your Website.

Once you have a business license and EIN, it is time to get your website. Your website is recommended to be professionally designed to make the most use of it. You can find an example of a good website or template at sites like Weebly or Wix. These sites will help you create what you need to avoid having to worry about adding all of the content yourself.

Contact a Payee Services Provider to Set Up Your Merchant Account.

Once your website is up and running, it is time to contact a merchant services provider (MSP). These companies specialize in helping small businesses obtain bank accounts, merchant accounts, and credit card processing. They have highly trained staff and can help you get up and running with the most reliable credit card processor possible.

Receive Your Merchant Account!

A common misconception about obtaining a merchant account is that it will be the end of the process. However, owning a merchant account does not guarantee that you will receive the money from customers who buy your products and services.

You still need to take steps like writing up terms and conditions for customers, sending out monthly statements, getting paid by your customers, and keeping track of their information on your online database or accounting software so that you can bill them whenever they renew their subscriptions or purchase another product or service. If you do not consider any of these things, they could decide to close your account, resulting in no notice or refund.

Benefits of Getting a Merchant Account as a Startup

For many, launching a new business is exciting and filled with possibilities. You may have an idea brewing for weeks, months, or even years. But it cannot be easy to start a business without all the money in the world to invest.

A Merchant Account as a Startup can help simplify your life, giving you access to funds right from day one and removing the need for high-interest loans. In addition, you'll already have a business relationship with some of the most important financial institutions in the world.

Access instant funding on day one

Why would anyone want to start a business without funding? If you're planning on accepting credit card payments, you'll need access to the funds for customers to make purchases. It means that you need your Merchant Account as a Startup. 

You can go about this two ways:

• You allow your customers to pay for goods and services via personal credit cards. This option may be suitable if you have a loyal fan base or participate in industries such as entertainment or fashion. It may be difficult to obtain merchant privileges with this option because of the higher risks involved with smaller businesses and the possibility of chargebacks.
• Credit Card Processing companies typically offer Merchant Accounts as a Startup. This option usually requires you to be a registered business and have the appropriate permits.

Faster funding compared to personal loans.

If you're going to need tens or even hundreds of thousands of dollars to start your business, a Merchant Account as a Startup can be a big money saver. The Merchant Account as a Startup will completely cover your business expenses right from day one. Rather than waiting months for a loan, you'll have all the money you need right away and begin generating revenue sooner than with loans or grants.

Simplify your financial life

Merchant Accounts as a Startup give you access to funds immediately and at favorable rates (usually lower than interest rates on personal loans), which means that your finances are already taken care of when you launch your business. Businesses with Merchant Accounts as a Startup also can accept international payments and receive payments in multiple currencies. It made it easier for your customers to pay you, no matter where they are located or what type of currency they use.

Build long-term relationships with multiple banks

Using a Merchant Account as a Startup will make it much easier to build long-term relationships with financial institutions rather than searching for new ones each time you need funding. It is similar to the benefits of becoming acclimated within an industry or social group – when you work with people over a long period, you form strong bonds and learn much more than when you join something new now and then.

Use funds for other purposes.

One of the best things about receiving a Merchant Account as a Startup is that you can use those funds for other purposes. Since you're not building your business with loans, there's no need to pay the money back or worry about interest rates, late fees, or penalties. You'll be able to spend those funds on business expenses that help your company develop faster and reach your goals sooner.

Get the funding you need immediately.

Getting a Merchant Account as a Startup will save you time and energy that would otherwise be spent applying for loans, writing business plans, and discussing finances with banks or investors.

Validate your business idea

If you're just getting started, it can be not easy to know whether or not your business idea is viable enough to generate profit and keep you afloat in the long run. A Merchant Account as a Startup will allow you to test the viability of your business model with real customers who are actually paying for your services or products instead of selling a lie that's only later revealed.

When you receive a Merchant Account as a Startup, it can help validate whether or not you have what it takes to succeed in your field.

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