Seven Questions to Ask Before Opening an Internet Merchant Account
Having an Internet merchant account is an essential part of accepting credit cardsover the Net. Here are some questions to keep in mind when setting out to open anaccount.
1. What documentation will the bank need from me? The basic requirements for an Internet merchant account are having a commercialWeb site and having a good credit rating, but what is exactly required to prove your goodcredit, and whose credit is being checked, the principal owner's or the business's itself?(Or both?) Some banks require a thorough check of your business history and creditrating, which may require a good deal of forms and preparation. Talk with your accountantbefore you talk to the bank, to see if all your papers are in order or if the accountantcan produce them in good time.
2. How long is the application process? Some banks promise they will have a response to your completed application in 48 hours. They can only make good on this promise if they have all the necessary documentation from you along with your application; otherwise, the process can take up to two weeks. It's important to get an answer to Question 1 above before submitting your application if you want a quick turnaround.
3. How experienced is the bank with Internet accounts? Even though the Internet is making inroads into society, not all banks grant Internetmerchant accounts, and not all of those that do have the same level of experience. Thebank is going to be looking at you; you should do the same to them. You may need to haveyour Internet merchant account with a bank other than the one where you normally dobusiness. If so, make sure your Internet merchant bank can transfer funds to your regularbank without problem.
4. If I don' t already have a Web site, will the bank open myaccount? You' ve already got a real-world business and are planning to open up shop on theWeb. You want to get everything set so you can start taking orders. Is this realistic?Some banks may not want to talk to you until you have a live site up and running. Withothers, it may be a question of granting you an Internet merchant account but notactivating it until your site is up and running.
5. What fees are involved? Ask to see a complete schedule of fees for allservices. Some banks even charge application fees for Internet merchant accounts,regardless of whether they approve your account or not. In addition to the setup fee thatall banks charge and the per-transaction fees (which can vary greatly), there may be somehidden charges as well. Ask if there are extra fees for statements, wire transfers to astandard merchant account with another bank, fees for using certain clearance services, orother add-on fees that may make the account more expensive than it first seems.
6. Will my Internet merchant account be compatible with the other elementsof my online storefront? One of the most common problems with merchant accounts is incompatibility with transactionclearing services, also called " commerce engines," and other elements of anonline storefront. Shopping cart software, the clearing service, and merchant account mustall be in sync. Don' t assume anything. Make sure to pick a merchant account providerand a clearing service that are compatible with your software. If all elements aren' tcompatible, you won' t be able to process transactions. A good bank will tell you ifyour account is compatible with the other elements, but it' s up to you to ask theright questions. Keep this question in mind if you decide to change your clearing serviceor software.
7. Can the bank help me reduce the risk of fraud? Can the bank itself or any of its partners provide you with some means of reducing therisks inherent in taking credit cards over the Internet? Ask the bank what systems theyoffer or if they have a partnership with companies that provide address verificationsystems, a " negative database" of credit card numbers that have been chargedback, or a more comprehensive suite of card authentication services.
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