Starting a Business and Establishing a Merchant Account

So, you have taken that big step, that giant leap into the abyss of commerce.  You went and decided to start a business.  You’ve incorporated, partnered or formed an LLC, got an EIN, a reseller’s license, maybe a dba, and opened a bank account.

You know in your heart that you are going to do fantastic, have fun, and make lots of $$$$! You may even have thought about how your customers are going to pay you: cash, checks, money orders, bank wires, bartering? I left something out, didn’t I? I didn’t mention credit cards.  Any business in today’s cashless society has to accept credit cards.  Unless you’re selling hot dogs on the corner, frankly, you won’t survive without accepting the almighty plastic.  I know, it used to be the almighty dollar, times have changed.

So what does it take to accept credit cards? 

It’s called a merchant account and it involves filling out even more forms, and hoping to get approved. What do I mean hope?  Well, approval is based on a number of factors, such as: are you swiping or keying in the transactions? What’s your average and high ticket sale amount?  What monthly volume are you requesting?  How financially strong are you (how much money do you have in the bank), and how is your credit score?  Wow, you’d think you were buying a car! A merchant account will put money in your business bank account upon approval, but there are fees to pay, the occasional refunds you will do, and chargebacks. So that application and all the documents that go with it are to make sure you are a good risk and can be trusted to pay what you owe.

Now you know you need to get a merchant account, but where do you get one?

You can search the internet and deal with a complete stranger who will want  your social security number, driver’s license, date of birth, etc., or you could go to your bank and they will have someone contact you by phone (bank employees don’t typically handle merchant accounts). Or, you can talk to someone like me.  I am an independent agent that has been in the business for over 20 years. I can help you maneuver the pitfalls, help you with that application, and get you great rates (much better than your bank).  I can also make sure you get the most up-to-date equipment to run those transactions, whether it’s a terminal, POS, mobile processing or a gateway.

Finally, I want to congratulate you on starting your business.

I know it’s a huge undertaking, one that may be more daunting than expected. I wish you much success, and I hope to help you gain that success.

Steven Segall can be reached at (818) 889-2004 (M-F, 8-6 PDT) or ssegall@sbcglobal.net.  Steve is an independent agent of CardReady LLC, a registered ISO/MSP of Westamerica Bank, Santa Rosa, CA.