How do I set up a Merchant Account?

Question

My husband own his own business and wants to start accepting credit cards, how do we go about it? Is it worth doing?

Answer 1

Is it worth doing it? DEFINITELY.

People and businesses live on plastic nowadays. If you don't accept credit cards, you will be missing out on a lot of sales.

Banks typically offer the best rates for merchant accounts. Depending on your bank, they may ask for your business plan, check your credit history, and check your business. Banks, however, are quite picky and typically do not offer merchant accounts to what they consider as high risk businesses such as a 'home business' or 'internet business.' I suggest you first go to your bank and check their requirements for merchant accounts.

If you are a member of Costco, they have one of the best rates in the market. So I suggest you look into it and become a member http://www.costco.com/Browse/Productgroup.aspx?Prodid=11105019&Ne=4000000&N=4018296&Mo=0&cm_re=1-_-Top_Right_Nav2-_-Top_services&No=0&Nr=P_CatalogName:BC&cat=55487&Ns=P_Price|1||P_SignDesc1&Sp=C

Here is a list of other merchant account providers. Check them out and see what works best for you
http://www.infomerchant.net/merchantaccounts/comparison.html

It is best to offer as many payment options to clients as possible -- credit cards, checks, money order, even Paypal

One thing to be careful with merchant accounts: just because you received an order doesn't mean that it's good. Always do a smell test if there's anything fishy with the order (for ecommerce, for example, high ticket items shipped overnight to a PO Box can be an indication of fraud). There's so many identity theft nowadays that you have to verify if the card actually belongs to the customer. Otherwise, you'll rack up a lot of chargebacks -- which aside from being costly (you are charged a fee), can result in a cancellation of your merchant account

Answer 2

I have been self employed for 9 years and will tell you it is definetely worth it. The trend is for companies and individuals to use a checkcard with mastercard or visa on it. Visa and Mastercard have the lowest fees per transaction. American Express is second. Stay away from Discover they charge more and charge the merchant(you) high annual fees just to accept their card.

It is not fun paying the transaction fees but peace of mind knowing the money is good is great.

Plus they deposit the money electronically to the account of your choice within a few days.

You will need to buy a credit card terminal and they can be costly new.

This company sells refurbished models with a warranty cheap:
http://www.checkmatic.us/

We are currently using the Verifone Omni 3200. Be sure to ask the merchant what models they accept first. Some merchants won't accept old outdated terminals.


You will start off with a higher per transaction rate but in 6 months have your transactions reviewed and they may lower your rate. It is based on volume, minimal chargebacks etc.

I recommend this company. They work with small businesses and have always been there when we needed help:
Innovative Merchant Solutions 800-397-0707 (tell them I sent you T-Shirts Ink and More)

Good Luck!

Answer 3

The merchant account will be integrated with your website through a payment gateway - an online service that merchant account providers use for transferring payment data between the merchants' websites and the banks' processing centers. The payment gateway will be integrated directly with your shopping cart. The integration process varies by providers and will be handled by their technical staff. In order to apply for a US-based merchant account, you have to comply with the following requirements: 1. Your organization needs to be legally registered within the US. Applicants for merchant services have to be either incorporated as businesses within the state that they reside in or they have to be registered with the local municipality and obtain a "Doing Business As" (DBA) name. Individuals are not allowed to establish merchant account processing services. It is a good idea to obtain a Tax ID but if you do not have one, you can use your SSN instead. Foreign establishments are also excluded from obtaining US-based payment processing accounts. 2. Your organization needs to have a physical address and a registered agent within the USA. 3. You need to have a bank account with a US bank. This will be the account into which you will have your funds deposited into. If you meet the above requirements, you will be able to go ahead with the application process. Generally the following documents will be required during a merchant account application process: 1. A merchant application - you will have to complete and sign this form. It includes general information about you and your business. 2. A copy of your organization's Articles of Incorporation, unless you are a sole proprietor. 3. A copy of a voided check for the account that you will want your money to be deposited into. 4. Advertising materials. 5. Business or personal financials. Your tax returns for the last two years may be requested if your business is new. Once all required paperwork is submitted, the set up of your merchant account should take no longer than two business days.

Answer 4

The fastest growing payment in America is CheckCards. Definitely should work with a company that can provide you with the type of account he needs for his type of Business. There is everything out there from portable imprinters to Wireless credit card machines.

Rates will differ based upon the type of business.

Is he providing a service that requires going to a house or business? If so he needs a wirless terminal.

Does he operate a retail shop? Plenty of temrinals to choose from.

Does he take orders over the phone or internet?
Then he can use ecommerce processing applications and doesnt need to purchase equipment.

Make sure you pick the right pricing program for your type of business. If you take orders over the phone, and you are set up for a retail account, you will be over billed. Sign up for a MOTO (Mail Order Telephone Order) account if taking orders over phone or internet. The initial rate will be slightly higher than a retail rate, but it will save you money in the long run.

IF YOU CHOOSE A RETAIL ACCOUNT, AND THE CARDS ARENT SWIPED, YOU WILL BE CHARGED THE RETAIL RATE 1.8-1.9% PLUS AN ADDITIONAL 1.5 - 2%.

I use a company that helped me get set up and helped me to understand how to get the best rate. Very Friendly.

Here is their website: http://www.omnitranz.com

Answer 5

If you are still not sure, the best option would be Paypal merchant services. They are easy to setup and there isn't a lot of setup fees.

Try and see if it will be worth while and then consider traditional options such as banks and other processing services.

Answer 6

If you wish to accept credit cards, I suggest working with Payanywhere. They feature the lowest commission costs. They don't have any setup or month-to-month expenses. I've been taking credit cards with them for more than 5 years and I'm satisfied with the service. You should check it out at: http://is.gd/payanywhere

Answer 7

Interesting question

Answer 8

This is a challenging question, and one that made me curious for a long time.