Merchant Account Application - 10 things you need to know about merchant account applications

if you're searching for merchant account providers here's ten things that you should know about the merchant account application process number one there is an underwriting process anytime that you're applying for an account with a bank there is going to be a vetting process and an underwriting process that you're going to need to go through so be prepared to provide information accordingly about your company and about your business anytime that you have an account with a bank there's risk of loss and in the case of credit card transactions every time a card is swiped or dipped there is the potential to have that transaction either charged back so there's risk of loss on every single transaction and because of that business credit and sometimes personal credit comes into play when you're applying for the merchant account number two is that the application will require personal information like your social security number home address in some cases business information tax ID information bank account information this is an application or a merchant account is an application with a bank and you should and and will be required to provide that information when you apply it doesn't matter if you're a sole proprietor or a corporation like an LLC or an S corporation you're still gonna have to provide personal information as the signer on behalf of the corporation some companies are gonna have a 24 to 48 hour turnaround time from the start of the application to the point where it's a hundred percent active and ready for you to start processing credit cards number three don't compare PayPal stripe and Square to a merchant account application they are very different things and I won't go into the details right now but I did do a detailed comparison video comparing PayPal stripe and square to merchant count processors and how they are very fundamentally different so check the links in the description for that video if you want to learn the details on why they're different but in terms of the application don't compare those companies to a merchant account application because you will bs for more information when you're applying for a merchant account because it is a true application with the bank or with the processing company directly and therefore you're just going to have to provide more information because it's a more secure connection and you're going straight to the bank versus processing through one of the aggregator companies which is PayPal stripe and square number four is different companies or different businesses require different merchant accounts so if you own more than one business or you're partners in more than one business you need to keep them separate and have a separate merchant account for each company so for example if you're selling clothing in one company and you know t-shirts and jeans and shoes and things like that in one company and in another business you have a lawn care company or something like that you need to have different merchant accounts and the important thing to remember here is not to channel to different companies through one merchant account because you can get your account shut down for that every company has different labels and si si codes which are the classifications or the categories that all merchant account companies put you into when you apply for the account so if you say you're selling t-shirts keep selling t-shirts if you say you're a lawncare company keep the merchant accounts separate number five is that PCI compliance is required if you're applying for a merchant account and someone tells you we don't have PCI compliance or you don't have to fill out those surveys or anything like that don't believe that you do have to and it's a card association requirement that every payment processing company every merchant account company that provides merchant services has to have a PCI self-assessment test in place for all of their businesses all of their companies that they're they're offering merchant services to then it is something that you'll be required to do number six high risk versus low risk businesses again every time you're applying for an account with a bank they're going to put you in two classifications based on risk so a company like a CBD oil business or a bankruptcy attorney or a a travel agency those are all very high risk companies bankruptcy attorneys are actually restricted merchants but something on the other hand like a clothing shop or a restaurant for example those are very those are on the lower risk and I'm not saying chargebacks could never happen but they're on the lower risk end of the spectrum and so you're going to be placed in a category based on risk rates and fees could be adjusted and changed riskiness of your business is a reflection of what rates and fees you will pay number seven is that there are different types of merchant accounts retail online and mobile are the three big categories that your merchant accounts gonna fall into and then there's hybrid accounts for example if you have a retail business where customers can actually walk into your store and pay you and you have an online store where you're selling your t-shirts and your jeans and your clothing online you're gonna have a hybrid between a retail account and an online account you can use the same merchant account in that instance because it's the same company and you're just selling your products in in a different way retail versus online so there's different types of accounts and retail accounts are typically lower risk and you'll get lower rates or you'll be able to pay lower rates for a retail transaction versus an online transaction which is typically associated with a little bit higher risk because the card is not physically present to swipe through the credit card terminal number eight is that rates are negotiable to a certain degree generally speaking when you pay let's say $100 per month to accept credit cards for the volume and the transactions that you did for the previous month 90 ish percent of that monthly fee is going to go back to the issuing credit card bank in other words the consumer that paid at the business it goes back to their bank because they issued the credit card and they're holding the risk for collecting that money from the credit card the majority of the fee goes back to the issuing bank and that remaining 10% or so or whatever it is the small sliver that's left over is paid the merchant account processing company for things like software and hardware and customer service and basically having the whole infrastructure and the whole setup in place for you to be able to utilize the merchant account in the merchant services so that is to say when you're applying for merchant account companies and you see the variations of monthly fixed fees and percentage rates the only part of that fee that you're going to be able to negotiate or the fees in general is that small 10% because that's the only thing that varies from provider to provider number nine is that contracts are also negotiable it used to be a standard that it was a thirty six month agreement three-year term with a three hundred to five hundred dollar cancellation fee that's not the case anymore it's very typical nowadays to have a month-to-month agreement with no cancellation fee so as you're out there searching make sure that you're checking the fine print of the paperwork electronically or actual paperwork that you're signing that you're not locking yourself into a long-term contract or that the you know the contracts don't renew automatically or that you have to pay a cancellation fee if you were to cancel the agreement and number ten is that not all merchant accounts are created equal there's a lot of variables that go into the approval of merchant accounts in the general upkeep of the accounts themselves for the business owners some merchants count providers will give you just the account with a little credit card terminal and and maybe an app but others will go the extra mile and give you online reporting they'll give you integrated credit card terminals they'll give you hosted payment pages they'll give you API gateways that you can plug in to external software the some of them even have third-party ecommerce plugins and so there's lots of extras nowadays that you can take advantage of so when you're comparing one company to the next make sure that you take a look at where you are right now and where you may eventually want to get to what your business regarding online sales or mobile sales or retail sales because some of those things can be automatically included or will just come with your merchant account versus others so in a competitive marketplace like merchant services is you want to make sure that you're taking these variables into consideration and you know what you're applying for and what you're gonna get as a result again this whole list is given to you or or presented to you so that you can have a better idea of what you're getting into so you're not blindsided when this information is requested from you when you apply for the merchant account and again if you're looking for a merchant account provider that's gonna give you more than just the bare minimum which I'm sure that's everyone of you watching check the links in the description for my recommendations on exact merchant account packages and programs if you're new to my channel thanks for watching if you learn something new or you found this video helpful it helps me out if you just give it a like or a thumbs up and if you want more content like this all on the topics of merchant accounts and payment pages virtual terminals and just in general ways to collect credit card payments and payments from your customers be sure to hit the subscribe button so you don't miss any notifications when new videos go out if you have any questions leave a comment below until next time I'm Brian Manning and I'll talk to you soon

Channel: BancardSales

Views: 24,439

Keywords: merchant account application, merchant account providers, apply for merchant account, merchant account, merchant account company, merchant services, how to apply for a merchant account, merchant account application process, paypal, stripe, square, pci compliance requirements, virtual terminal, hosted payment page, payment gateway, PayPal, Stripe, Square, merchant account agreement, Brian Manning, Bancardsales

Id: USeW1tSfJM4

Length: 10min 18sec (618 seconds)

Published: Thu Aug 30 2018