What is a merchant account and how to open it?

A merchant account is today an integral part of modern business, which allows companies to conveniently and securely obtain payments for goods and services. Opening a merchant account requires compliance with certain requirements and possessing documents, but its use can significantly improve financial processes and increase business efficiency.

Let’s take a closer look at what a merchant account is, how to open it, and what benefits it provides for business.

What is a merchant account and how does it work?

A merchant account is a special bank account that allows companies to accept payments from customers through various payment systems, such as credit and debit cards, electronic wallets and others. This account is connected to payment systems that instantly process transactions and transfer funds directly to the company’s account.

The merchant account operating process includes several stages:

• Customer Payments: Customers make payments for goods or services by choosing their preferred payment method.
• Payment processing: The merchant payment system (or processor) processes the transaction, checking the card details and the sufficiency of funds.
• Authorization and crediting: If the payment is successful, the funds are reserved on the client’s account and then credited to the company’s merchant account.
• Withdrawal of Funds: Collected funds can be withdrawn to a corporate bank account or used for additional payments.

Thus, with the help of a merchant account, when customers make a purchase with a bank card online or offline, even in different currencies, countries and in bulk, the money instantly goes to the business’s bank account.

Benefits of a merchant account for business

Opening a merchant account brings companies a number of significant benefits:

• Expansion of the customer base – the ability to accept payments through various payment systems and credit cards increases accessibility for customers around the world.
• Convenience for customers – electronic payments allow customers to quickly and conveniently pay for goods and services.
• Increase sales – ease of payment contributes to an increase in the number of completed purchases.
• Finance tracking – a merchant account provides transparency of financial transactions and accounting of payments.
• Improving the image of the business – sites that allow direct purchases are considered to be modern and technologically advanced.
• Reduced payment processing costs – with the right choice of merchant provider, it is possible to minimize transaction processing fees.

Requirements and documents for opening a merchant account

Connecting a merchant account for a business is not so easy, and the company needs to carefully prepare for this request.

The first point worth to know is that a merchant account can only be connected to an existing business and if there is an already registered legal entity. So, if you just created a website and want to trade with us without legal registration, not a single bank or payment system will connect a merchant account for you.

Therefore, in order to open a merchant account, a company must fulfill a number of requirements and provide certain documents, that usually includes:

• Registered legal entity or individual entrepreneur.
• A valid company bank account in the relevant currency.
• Evidence of business activities, such as articles of incorporation and licenses.
• Documents confirming the identity of the account holder and authorized persons.
• Corporate website containing information about goods, services, refund policy, purchase, delivery, customer data security, etc.
• Sales business scheme, including a description of customers, service geography, purchase currencies, approximate monthly turnover.
• Technical integration with the chosen payment system.

Choosing a merchant account provider

So, when choosing a merchant account provider, you need to consider the following factors:

• rates and commissions
• types of supported payment systems
• payment processing speed
• service and technical support
• provider reputation
• the level of security and protection of customer data.

Let’s take a closer look at some of them.

A rather important point is the supported types of payment systems. The more different payment methods a merchant account supports, the more convenient it is for customers, and therefore more profitable for you. For example, a merchant account can support the following types of payment systems: Visa, MasterCard, American Express, Diners Club, JCB, UnionPay, PayPal, Google Pay, Apple Pay, Discover, Bitcoin, Qiwi, etc.

Data security is also an important aspect when working with a merchant account. Companies must follow the PCI DSS (Payment Card Industry Data Security Standard) standards to ensure that the sensitive data of customers who actually share their banking data with you is protected, and the first priority is to ensure that it is not shared.

In general, the choice of a merchant account provider is best entrusted to professional consultants who, taking into account your activities and business geography, will select the most profitable bank or payment system based on their experience.

Merchant account maintenance costs

Another important point is the costs. Opening and using a merchant account associated with certain costs, such as transaction processing fees and account maintenance fees, etc.

Therefore, before opening this account, it is important to know what costs are associated with the merchant account:

• Connection fee
• Monthly maintenance fee
• Transaction fee
• Subscription fee
• Acquiring fee

At the same time, the rates and commissions for using a merchant account may vary depending on a number of factors, including the type of business, turnover, risks and types of payments accepted.

Therefore, it is necessary to choose a bank or payment system that will guarantee not only the stability and security of work, but also offer beneficial services in terms of fees and commissions.

Successful opening of a merchant account: recommendations

Thus, a merchant account is a powerful tool for business development in today’s digital economy. It allows businesses to accept payments in a variety of ways, expanding their customer base and building consumer confidence. But, to successfully open a merchant account, you should:

• Find a reliable merchant account provider
• Use a reliable processing center
• Prepare a complete set of documents and information
• Provide technical support for integration with the payment system
• Follow best practices for data security
• Use only secure payment methods
• Reliably protect the storage of customer data

Please note that opening a merchant account can take up to 3 weeks, so you should not expect that your application will be approved immediately. Moreover, we recommend applying for several providers simultaneously in order to choose the most profitable option and the provider that will agree to work with your business.

If you need help in this matter, we are always ready to accompany the opening of a merchant account and provide its documentary process.