If you’ve just started your own business, then you’ll probably be looking forward to your opportunity to get out there and start making a lot of money. However, before you can begin to accept payments from your clients, you’ll need your own merchant account.

A merchant account is basically a bank account that’s designed to hold the funds you receive from credit and debit cards online. The funds in your account can be transferred into your business bank account at a time that suits you. Merchant accounts provide you with a secure payment gateway for accepting debit and credit card transactions – while ensuring that important details don’t get leaked.

Before you Apply for a Merchant Account

Before you begin applying for merchant accounts, you’ll need to be approved by a bank account. Account providers risk losing money with fraudulent transactions, so they’ll need to screen you to ensure that you’re not a “risky” company. To screen you, account providers will look at:

• Your business documents: They’ll need a void check from your bank account, a business license, a letter from your bank, and a form of identification.
• Financial statements: Generally, most account providers will want to make sure that the customers they’re working with are financially stable before they begin to offer up accounts. If you have your financial statements, you should share it with your providers.
• Processing statements: Ideally, you should have the past three months of your processing history available to give you the best possible chance of making a purchase. You want to show that your business is trading money with as few chargebacks as possible.
• Cover letter: Ideally, it’s a good idea to let your providers know exactly what your company is doing so that they know what they’re working with. This could help you to increase your chances of an approval.

Know If your Business is “Risky”

As mentioned above, most account providers will want to avoid doing business with any company that might be considered too “risky”. If your company is associated with anything untoward, then you’ll need to look for a specialist processor, as you won’t be able to get approval as easily.

Even if you aren’t classified as a high-risk business, there’s a chance that you could be seen as a moderate-risk business, if you offer a service that has the potential for a lot of cancelations. Gyms, travel agencies, and online auction sites are all considered possible risks.
Although you probably believe that your company is a stable and reliable enterprise, it’s a good idea to talk to your account provider and find out what they consider to be a risk for their company.

Consider the Terms and Conditions

The best way to apply for an account is to go in with a realistic set of expectations. At the end of the day, things that sound too good to be true usually are. You will need to make sure that you check the fine print when it comes to assessing your accounts. If you get approval for something, make sure that you look at the document in depth – even if it’s particularly lengthy.

Reading your documentation in depth will help you to make sure that you don’t overlook anything important like rate fluctuations, hidden fees, and more. This could reduce your issues with a range of frustrating problems and ensure that you don’t overspend when you’re trying to set up your new businesses.

Importantly, the processing rate that your company might need to pay with your merchanting account is likely to fluctuate depending on the kind of payment you receive. For instance, credit cards with benefits attached to them generally come with higher processing costs than standard cards. Each card comes with its own rate, and it’s worth looking into this before you get started.

What If You’re Declined?

In a worst-case scenario, if things don’t go entirely according to plan when you’re taking out your merchant account, then there’s a risk that your application may be declined. The definition of what your account provider or bank considers to be a “risk” may be different depending on what services they offer.

If you don’t get the account that you want, there’s always a chance that you could begin looking at specialist providers that have experience handling high-risk accounts. However, it’s worth noting that these providers can sometimes charge a lot more than their counterparts. Make sure you look at all of your options and do what you can to make your business as “low-risk” as possible.