If you’ve never run an e-commerce business, applying for a merchant account so you can process credit cards online may seem daunting. First, you have to build a website and get a supplier’s agreement. Then you have to research payment processors to make sure they won’t dupe you in the end—ask around for references, read online reviews, check out the processor’s page on the Better Business Bureau’s website. Once you’ve found a few great contenders, it’s time to prepare your e-commerce merchant account application package.
Initiating Contact
When you visit a payment processor’s website and fill out the sign-up form, don’t confuse this for the application. The sign-up form is just the first step to initiate contact between you and the payment processing company. Make sure you provide the information needed to get in touch with you. This should include your name, your company’s name, a working telephone number, a working website, and the best time and method to reach you.
Some payment processors may require more initial information so they know which account manager will be able to help you best—sales volumes, average ticket size, industry type, etc. Other payment processors may only require your name, email address, and telephone number. It all depends on the company.
Filling Out Your Application
Some applications can be long and discouraging. Don’t worry. As a business owner, it’s all information that you should already know—and as a startup business owner, it will all be fresh in your mind. Just as with the sign-up form, the information each payment processor requires on their merchant account application will differ based on the company.
On your application, you will have to fill out basic information about your business including the website URL, legal business name, the name it does business as, the country where you incorporated your business, and your business’s address. You will also need to provide information regarding sales—the average and highest ticket amounts, the projected number of monthly transactions, and projected monthly sales volumes for six consecutive months.
Next comes all of the standard questions.
- Do you have a customer support department?
- What currencies do you want to accept?
- In what currencies do you want to receive payouts?
- To what countries will you be selling your products or services?
- What is your line of business?
- Do you have a processing history?
- Will you need a virtual terminal?
Underwriting Documents
This should come as no surprise to you, but the underwriting documents you need to submit to each payment processor will most likely differ from one company to the next. However, you should expect to supply the following underwriting documents:
- Valid photo ID
- Résumé or CV
- Business and marketing plan
- Certificate of incorporation or registration
- Supplier’s agreement
- Company bank reference letter and statements
- Personal bank reference letter and statements
- Payment processing history
- Business license(s) required by law, if any
- Proof of domain ownership
Submit, Sit, and Wait
If you provide your account manager with all of the required underwriting documents and your completed e-commerce merchant account application, it should only take a few days for the payment processor to give you a response. A payment processor that has your business’s best interest in mind can typically have your website processing credit cards online in one to two weeks.
The most important thing to remember when you receive a merchant account offer is to read your account contract’s terms and conditions carefully before signing and returning to your account manager. You need to understand the regulations associated with your merchant account to avoid penalties or terminations.
Online Credit Card Processing for Startup Businesses
Not all payment processors have an e-commerce merchant account solution for startup businesses. Being an e-commerce merchant will raise your risk factor for faceless fraud and so does not having processing history. Many acquiring banks—the type of bank that establishes merchant accounts—want to know that you’re business is a good investment before offering you an account by seeing a successful processing history.
Once again, don’t worry.
If you own a startup business and you’re expecting a relatively small number of sales in the first few months, find a payment processor that offers third party accounts. A third party merchant account will allow your payment processor to process payment for you, but under their name and through their merchant account.
Whether you are applying for a direct e-commerce merchant account or a third party merchant account, there is a solution for all legal businesses to process credit cards online. You just have to know where to find them.
Meghan Faye Wolff is the senior copywriter and marketing specialist for Instabill Corporation. Instabill provides e-commerce and MOTO merchant accounts to startup and existing businesses worldwide. Meghan writes about online credit card processing, marketing and business tips, and credit card industry news on the Instabill blog.