FIS Modern Banking Platform
Advance your bank with a modern core platform.
How to open your new merchant account
WORLDPAY EDITORIAL TEAM
July 30, 2019
Opening your business to the world is an exciting time.
Starting a business is also when you need to make important decisions about essential infrastructure. Take payments. Cash and checks still have their place in many businesses. Yet today, accepting card-based payments and alternative payment methods like digital wallets is essential for most businesses.
This article outlines the essentials of what you’ll need to know to get your business started with a new merchant account to accept electronic payments.
What’s a merchant account?
A merchant account is a special type of account that allows business to accept credit cards, debit cards and other electronic forms of payment. Merchant accounts are governed by agreements between your business and your payment processor or merchant services provider. Merchant accounts make it easier for businesses to receive funds from customer purchases in a timely manner.
Does every new business need a merchant account?
If you plan on accepting credit card and debit card payments, your business needs a merchant account.
The historical norm is for new merchant accounts to be obtained directly. But merchant accounts aren’t suited for every business. Today there are also many third parties that facilitate payments for smaller businesses as part of a broader offering of services. Many payment facilitator service providers offer a full range of payment features that are ideal for many new businesses looking for easy and simple onboarding.
Payment facilitators may offer underwriting, compliance, reporting, and customer service in addition to core payment processing. A payment facilitator functions as an aggregator, providing payment services as part of broader offerings for small businesses, such as gateway services or eCommerce platforms.
Where do I get a new merchant account?
New merchant accounts can be setup with a payment processing company or via a third-party merchant services provider. Merchant accounts are different than your business bank account that you use for day-to-day expenditures. The financial institution that holds your business bank account can often help obtain new merchant account on your behalf.
What will I need to do I get a new merchant account?
New merchant accounts require underwriting and approvals. That approval process begins with an application to a payment processor or merchant service provider. The process is easier than it sounds and is faster than ever before. At minimum you’ll want to be prepared to provide a few essential items:
- Employer Identification Number (EIN)
- Business checking account information
- A business license, typically issued by your state
- Your social security number
- How much transaction volume (sales) do you expect?
What you’ll need to get started depends on several factors, like the number of transactions and total purchase volume you expect. Like a loan, the underwriting process may require additional documentation to account for your business history, especially if your account requires a high line of credit.
What are the next steps?
Establishing a new merchant account either directly or indirectly is a necessary first step to accept card payments from your customers. You’ll want to have a good idea about how you want accept payments.
- For in-person (or “card-present”) transactions you’ll want to choose between a simple credit card terminal, a smart terminal, or fully integrated POS system
- Will your business accept payments over the internet?
- Do you need gateway services or an eCommerce platform provider?
- Do you plan on offering subscription services that require monthly recurring payments?
- Do you have a security plan to protect your business from payment fraud and data breaches?
Getting your payments in order is a key checklist item to start your business off on the right foot. A great place to start is to connect with a payments expert who can help you navigate the options and find a solution that’s customized for your business needs.
Worldpay makes credit card and other electronic transactions as secure and seamless as possible––online, in person or wherever commerce takes place. Simply and flexibly connect your business to the future of commerce and open a new merchant account with Worldpay today.