Your Merchant Account: Quick and Easy
Many businesses setting out to take the e-commerce plunge quickly discover two things.
First, even if you already accept credit cards in a retail environment, you need a separate merchant account to accept credit cards on the Web.
This is known as an Internet/MOTO account.
Second, there are a few more requirements for getting an Internet/MOTO account than a retail/card present account.
Contrary to what you might have heard, opening an Internet/MOTO account is far from impossible. In fact, it's not hard at all for most legitimate businesses.
As a provider of merchant processing services, I repeatedly come into contact with merchants who get frustrated with the application process and never follow through to completion.
But the application process doesn't have to be frustrating, and it doesn't have to take a long time. We find that the biggest, single cause of frustration for merchants arises from submitting incomplete applications.
So the purpose of this article is to provide you with a checklist of minimum prerequisites required by many banks and account providers for establishing an account.
Here they are, in no particular order.
Have your Web site ready before you apply. It might sound silly, but the majority of incomplete merchant applications I see are so because there's no evidence that the business does what the application says it does.
Make what you're selling obvious in your marketing collateral. Include pictures and descriptions of the products on your site. This is required to get an account -- and just common business sense.
Include pricing information. Make sure your Web site and marketing materials include the prices of your products. If it's hard to give specifics on the price of your product or service, at least include general language such as, "Starting at just $19.95!"
Clearly indicate your returns policy. Naturally, providers like to see phrases like "100% satisfaction guaranteed." But even if your policy contains restocking charges or no refund clauses, many providers will be fine with that as long as the policy is clearly stated on all collateral.
List your shipping policy. How soon after placing the order will the product be shipped? More importantly, will you wait to charge the card until the product is ready to ship?
Make your address and phone number easy to find. Even if your business address is your residence, it should be included. Most providers will not accept P.O. boxes. If you're asked to display your physical address and refuse, providers take that as a red flag that you might be fly-by-night operation and a credit risk.
Have prior credit card merchant statements ready, if applicable. If your business is currently accepting credit cards in any form, be prepared to provide three months of processing statements. Providers use your established record as a merchant to help assure them you're a worthy risk and to give you the best rates.
Have business financials available if you plan to process a large volume of credit card sales.
This often includes bank statements, balance sheets, and profit-and-loss reports. How much is a large volume? That varies by provider, but it's commonly defined as $10,000 (U.S.) or more per month in card sales.
Make sure you've signed all required fields. And make sure the signers represent at least 50% ownership of the business. If you're a corporation, there's usually a place for the secretary to sign as well.
Don't edit the merchant agreement. Sometimes merchants don't like particular clauses in agreements. That's fine, but don't waste your time crossing out part of the agreement; providers aren't going to change it for you. Simply move on to another provider.
But remember, most merchant agreements are very similar.
Include a voided check. This is to verify your bank account and routing information, so that the cash from the sales you make can be put in your bank account.
If applying by fax, make sure your fax is of sufficient quality to transmit a legible copy of your check, particularly if your check contains anti-photocopy technology. Color scanners will often do the trick when faxes and photocopies won't.
Include proof of your identity and proof that your business is legal.
For you, this can be a copy of your driver's license. For your business, include documents such as a copy of your business license, assumed business name certificate, articles of incorporation, and lease.
Sometimes providers will also accept utility bills or invoices from suppliers as proof that you're legitimate.
Know how you'll process cards.
Last, but not least, be able to tell your provider whether you'll be using an Internet gateway service like VeriSign or PocketCashier, software such as PCCharge or a traditional card terminal. It can make a big difference in how your account is set up.
And if you're accepting card information via your Web site, be prepared to prove that customer information is protected by SSL encryption.
At first glance, it might look like a big list. But when you review it carefully, you'll find you probably have most of these items on hand.
When you don't understand why your provider requires some piece of information, remember that you're applying for a line of credit for your business. As a result, the provider is examining you for your credit worthiness and needs enough information to make a fair judgment.
Use this checklist as a test of readiness. If your business passes, chances are it'll be smooth sailing for you and your merchant account application.
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