You can open your own merchant account or use a third party credit card processor to

accept payments from customer credit cards. The merchant account is where the credit

card company sends funds deducted from customer accounts to pay for the purchases they

make. You can also use a third party account to accept these payments. The credit card

company will send the processed payments to the third party payment account and the

third party company will forward the funds to your business account minus the service

charges and transaction fees.


You can apply for a merchant account with a local bank or through a merchant service

provider. You may need the following to apply:


  • You need to have a business account
  • Business information including name and location
  • Sometimes you may need a business license
  • Consider underwriting


You can also do a few things to increase your chances of eligibility for a merchant account.


Good credit ratings


Past bankruptcies, late payments or outstanding bills can affect your business’ credit

ratings. You need to clean up your credit ratings before you apply for a merchant account.

You can contact companies that generate credit reports and request them to clean up your

credit history telling them if all these factors have been resolved. A good credit rating

makes a great impression on credit card transaction processor.


Have a refund policy


Charge backs are often a loss to the credit card processors. The credit card company needs

to know that they won’t be constantly processing refunds for failed orders and delivery of

failed products. You need to have a clear refund outline that is known to all clients in order

to handle such cases properly.


Honesty is the best policy


In case you have any had any pervious merchant accounts, bankruptcies or judgments, it is

advisable to come clean with the merchant service provider to improve your credibility.

This information is often part of public record and quite difficult to hide. If you are upfront

with your application, it will be much easier to open your new merchant account.


Be willing to pay higher fees for special requirements


You may be required to pay higher fees to open your merchant account or to accommodate

special restrictions. It is worth the trouble if you want to provide customers with as many

payment options as possible. You will generate more sales through impulse buys = to cover

the cost of whatever extra fees you pay for the merchant account.


Get a statement evaluation


You may need a statement evaluation for your business to determine what the best credit

card processing option is for your business. There are many merchant service providers

and each of them often has something different to bring to the table. Rather than working

with the wrong merchant processor and paying penalties for terminating the service too

early, you can reduce the amount of time and money wasted and get cheaper credit card

machine rates by getting a statement evaluation and choosing the best service based on

your business evaluation results.