A Guide to Merchant Accounts for Start-Ups

If you’re starting a business, to improve your bottom line you will want to accept payments from customers and clients as flexibly as possible. Why some people still do use cash, most of us nowadays simply carry our cards around with us. If you don’t have a card payment terminal to hand, you could be losing out on a lot of business.

To handle any card transactions, of course, you need to hold a merchant account.

What is it?

A merchant account is specifically designed to take debit card and credit card payments from your business. In the past, this was fairly costly business for SMEs and was often difficult to set up. With the development of better online resources, however, the merchant services industry has exploded, the cost has come down and accessibility has vastly improved.

Payment Gateways and Payment Processors

When you start looking at merchant services, the first term you’ll probably come across is the payment gateway. If you are using a card machine in a store this transaction goes to the card company to see if the person paying has enough money in their account. For ecommerce transactions, the payment gateway accepts the order and processes the transfer of money from the cardholder’s account to the merchant account of the business.

The other term you might hear is payment processor. Most people think this is the merchant service but it’s really the payment service that the gateway sends information to. Payment processors also handle other transactions such as chargeback requests when a customer requires a refund.

Applying for Merchant Account

You can’t just set up a merchant account, you need to apply for it and be accepted by the provider. This is because each time a card transaction is undertaken, for the merchant service there is a risk and the potential for it to be fraudulent either on the customer’s side or that of the business. All reputable merchant services therefore have a screening service (and may charge for you to apply). The application process generally involves:

  • Providing financial statements for your business: For startups this can be problematic as they’ve only just begun trading, though in most cases the potential that you have a lower trading volume could well see you accepted.
  • Processing history: If you are swapping from an existing merchant service to a new one, they will look at this to see if there have been any problems.

Getting the Right Advice

The number of merchant services out there is good news in one way for small businesses – there’s plenty of choice. The problem is finding the merchant account that works for you and which meets your needs as you start your business and begin to grow. There are plenty of options to consider and it always pays to get some sound advice and support when setting up. You could do all the research yourself or you might want to get advice and guidance from a service such as acceptcardpayments.com. We will not only be able to find the right merchant account for your startup business but we will be able to work with you so that you improve your chances of being accepted. Having a card payment solution for your business is vital in today’s world of commerce, not only for improving sales but ensuring you have a safe and secure way to do business with your growing customer base.