Introduction to Merchant Accounts

In order for a business to have the ability to accept credit cards as payment, the business must have a merchant account. The merchant account will handle the processing tasks that occur "behind the scenes"; all the work that is required to withdraw money from a customer's credit card account and deposit into the businesses checking account.

Merchant Account Requirements

The process of applying for a standard merchant account will depend on the particular provider you select. Most applications require the same information though, and it can help if you have the information gathered before you start the application. Most merchant accounts will require the following:

Business License, articles of incorporation or reseller license (this might be the "DBA" from the county Register of Deeds office. ) This proves you have a legitimate business.
A business checking account.
A voided check from the account that you wish to have the credit card transactions deposited into.
Photographs of your business office
Copies of tax returns
Copy of your Driver's License
Have a Web Site

Different Merchant Account Solutions

There are different types of merchant accounts to meet different business needs. The type of account you need will depend on your specific business. Below is a list of processing solutions:

Retail Terminal (Swipe) - If you own an actual brick and mortar store, the retail terminal is ideal for your credit card processing solution. You swipe the customers credit card through a terminal to process the account. Retail terminals result in low merchant account processing fees as you have the physical card in your possession when making the transaction and it is believed that these transactions have lower risks for fraud.

Real-Time Processing - This is the ideal option for internet based businesses. Customers input their card information and a Real-Time processor will send the orders through the merchant account and you will not need to do anything to start or complete the transaction. Real-Time processing is automated, the funds will be taken from the merchant account and then automatically deposited into the business checking account after a few days. Real-Time processors are already a secure environment, so it may eliminate the need for a security certificate.

Virtual Terminals - This solution allows you to process credit card orders by phone, fax, or mail. The virtual terminal is a web based program that business owners log into and manually input the customer credit card data. You can submit the information and it will be processed securely. For businesses that frequent trade shows and other mobile locations, the virtual terminal is an ideal on-the-go credit card processing system.

Other Options

For internet based businesses, there is a wide variety of options for credit card processing solutions. One of the most well known processors include PayPal (www.paypal.com). With paypal, you can quickly and easily set up a button on your web site to accept payments- whether it is a credit card payment, or a payment from your customers bank account. You do not pay an annual fee or a set up fee- instead, you pay a few cents per transaction.