What Is a Merchant Account? Everything You Need to Know

Imagine you have set up your thriving business. Now you’re all ready to accept payment from your customers. How do you do that? Well, in the olden days, it was easier when everyone was carrying around cash or cheque books in their pockets. But today, times have changed and your business needs to keep up. Here is where a merchant account comes into play.

In simple words, a merchant account works as a middleman between your bank account and the payer’s. If you are a business or an enterprise, then read on because this is everything you need to know about a merchant account.

What is a Merchant Account?

A merchant account is where all the credit and debit card transactions from your payers are deposited. These funds are then transferred to your business bank account within 3-5 working days. As time has progressed, there are providers who have come up with same-day fund transfers, but more on that later.

It is important to note that your merchant account is not your primary bank account, nor can it become one. Before applying for a merchant account, you need to have a primary business account set up.

So, just to reiterate, think of a merchant account as a temporary and mutually agreed upon bay where transactions are settled and appropriate fees are charged by each party involved. This not only reduces the risk for all parties, but also allows for more sophisticated integration.

How to get a Merchant Account?

Following the right steps, you can have your own merchant account up and running in no time.

Steps to follow:

1.    Acquire a business licence : It's critical to demonstrate the legitimacy of your company in order to open a merchant account. So obtaining a business licence is the first step in getting a merchant account.

2.    Start a Business Account : The next step is to open a business bank account after obtaining a legitimate business licence. Your merchant account provider will transfer the money from your credit and debit card sales into your business bank account and withdraw their fees from there.

3.    Consider Your Needs : It's crucial to assess your company's needs before considering obtaining a merchant account. For example, you must choose which credit and debit cards to process. Do you prefer to accept Visa and Mastercard over American Express? Prepare a list of everything you'll need for your business before opening a merchant account.

4.    Evaluate providers of merchant accounts : Now that you have a solid understanding of your requirements, you can utilise that knowledge to begin comparing several merchant account providers in order to choose the one that is best for your company.

Let's examine some considerations for choosing a merchant account provider.

• Strong Protection: Select the merchant account provider that is fully compliant with the latest regulatory guidelines.
• Customer service that is flexible: If you have any problems, look for a provider with free, on-site customer assistance that is available around-the-clock.
• Quick Funding : As stated above, you can receive the funds in your account more quickly by using next-day funding options (if available) offered by some merchant account providers.
• Models for Pricing That Are Open : It can be difficult to understand credit card processing costs. Therefore, it can be a clue to switch to another supplier if your merchant account provider is unsure regarding the cost.

5.    Complete the application : After deciding on a supplier, you will be required to complete an application that asks for specific details about your company. Documents you'll probably provide:

• Contact details
• Information about the signatory
• Bank Account Number
• Tax ID

6.    Start processing once your merchant account has been approved : Depending on your supplier, opening a merchant account might take anywhere from one business day to a week. Once authorised, you can immediately begin receiving payments.

If you are looking for a payment processing brand to set up your merchant account easily, check out Worldline India, a one-stop shop for all your business needs. Step into the future of accepting payments with Worldline India.