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Receiving a Merchant Account
Getting a merchant account sounds like it would be a simple process, but there are many steps to consider. Obtaining a merchant account can take up to 6 months, depending on how smoothly everything goes. If you are new to merchant accounts, it is important to apply early giving a cushion for any mistakes. Banks can be very slow at processing merchant account applications. Also, it is also important to apply to more than one bank; giving you the ability to bargain because the banks do not talk to each other about their merchant account clients. For an example, if all the banks are asking for an up-front payment, you can tell each one that another bank that you’ve applied to didn’t demand it. Banks do want your business, especially if you’ve suggested the right impression, therefore giving you the ability to negotiate the terms. While preparing your business plan, be cautious with your expected revenue. However, when you’re talking to the bank, you should convince them that you will be a successful business that will bring them lots of profits. Your expected number will also sway how big a portion the bank asks for. If the number is smaller they will usually want a bigger cut and vice versa.
Fraud is still a big problem for banks when they think about online processing. Your account manager will need to convince the fraud department that you’re not a great fraud risk. In order to do this, you have to learn all about online fraud, and that your business has covered all the bases to make sure fraud never occurs. It is important for your own business to think about fraud ahead of time. Make the bank feel confident that no fraudulent activity will occur, or your application will be delayed. Getting your first merchant account can be a really difficult and scary, but with these tips it will be a simple process. It is important to remember to begin the process early, apply to many banks and know everything about fraud.
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