Whether you’re a new business or you’re already processing payments through an aggregator, obtaining your own merchant account is something you should consider.
A merchant account is a type of bank account from an acquirer that allows you to accept credit card payments. The funds from each transaction are deposited in the merchant account then dispersed into your bank account on a consistent basis. Merchant accounts reduce payment delays and account holds.
Aggregators are optimal for small or new businesses because rates are fixed and it’s straightforward to set up. With an aggregator, you don’t need a merchant account; you are grouped together with other merchants in an aggregation (hence the name). An aggregator bares higher risk in removing entry barriers and allowing instant credit card processing.
However, as you grow, a merchant account becomes more ideal because the rates are tailored to your individual business. Choosing the right merchant account provider for your business is essential. For example, Payfirma not only provides you with a merchant account but also benefits such as 24/7 customer service, in-depth analytics, and a compilation of your transaction data in one place. The tradeoff of a merchant account is a lengthier application process.
It is a more extensive process than signing up with an aggregator. However, you’re not alone — payment processors will guide you through the application. Once submitted, approval typically takes 3-7 business days.
There is inherent risk involved with processing credit card payments which is why you need to provide as much information about your business, yourself, and your processing activity as possible so acquirers can assess your eligibility.
Below is information you should have on hand when applying for a merchant account:
- Legal name of business
- Name you do business as
- Phone number
- Business start date
- Number of employees
- Primary contact
- Scanned copy or clear photo of business void cheque
- Full name
- Home address
- Home phone or cell
- Date of birth
- SIN number
- Driver’s license number
- Anticipated monthly credit card sales volume
- Most common transaction size
- Largest transaction size
- Smallest transaction size
- How you want to accept payments
- If the business is seasonal
You can process payments with or without a merchant account; it just becomes a matter of deciding which method better suits your business. If you decide to sign up for a merchant account, preparing the above information will expedite your process.