Merchant Account Guide for New Businesses (part 3

The parts of the application:

Part 1. General business information.

Part 2. Specific business information and rate information.

Part 3. 2-Signature blocks; Accept Account Terms and Personal Guarantee.

Part 4. Additional Information about your business (varies by the processing bank)

Part 5. Voided check form.

Part 6. A large information guide from the specific processing bank. (varies by the processing bank)

Checking the Application

First look through the application and make sure everything is there. Then go to the fees section make sure that you understand every fee on the application. The fees that you will see on any application are the, statement fee, monthly minimum, processing fee, and transaction fee. There are more fees on the application but you want to be sure that these fees are acceptable, because these fees will determine how much you will pay each month for credit card processing. These fees vary with each provider but are usually close between different companies. If one company's fees are significantly lower than others, then they are probably making their money up somewhere else, so read all of the fine print. If they are significantly higher, then you should shop around some more. If you do not understand any fees, call the sales person whom you received the application from, and ask them to go over all of the listed fees with you. Also make sure you know what card you will be able to accept. Amex should not have a setup fee, while discover will charge a small setup fee. Amex and Discover will have different rates than Visa and Mastercard. If you feel that they are trying to hide fees or they aren't giving you a description to your liking, take your business elsewhere.

Next look for the early termination fee. This is the fee that you will have to pay if you cancel your account before the contract is up. You will either find it in the small print before the signature line, or in the list of fees section. If you cant find one call who sent you the contract and clarify the length of the contract and any termination fee. There is usually a termination fee, which varies but is usually between $200 and $300 if you close your account early. Also check in the small print to see the length of the contract. Most will be 2 - 3 years. Not all service providers have a termination fee, but that does not make the contract any better. Unless you are planning on going out of business before you even start accepting credit cards, this should not be the deciding factor when choosing your service provider.

Other fees that providers use to make an extra dollar are yearly fees, monthly fees, service fees, programming fees, reprogramming fees, setup fees, application fees, and miscellaneous fees. Unless your business type forces you into a high risk category, you shouldn't have any application, setup, programming, or reprogramming fees for the merchant account.

Once you feel comfortable with the merchant service provider and the terms of the merchant account contract, send your application in for processing. It usually takes three to four days to get the account approved and then another one to two days to get the terminal to your door. It may take a few days more or less but it should be close to this amount of time.

Occasionally merchant accounts pend due to the underwriting department wanting more information about this business or merchant account signer. This happens in one out of ten accounts so don't get worried. They will most likely just ask for some more information or ask you to call the processing bank to clarify something about your business. If your account gets declined, which should vary rarely happen if the provider got enough information about your business, you will probably have the option of signing with another processing bank. Your fees may be higher if the account is declined once, because your credit might not be high enough or your business is higher risk. Just follow the same steps and make sure your sales agent is being honest with you and your business. If you are ever unsure or you feel bad about the company, take your business elsewhere. Find another provider and start over. Finding the right service provider is as important as getting good rates for your account.

Once your account is approved and you have your terminal or internet gateway information, you should call your technical support to learn how to properly process transactions. Once you process, the money should be deposited into your account in 24 - 48 hours.

It is fairly common to have a problem at some point in your businesses credit card processing history. That is why it is important to process with a business that will work with you to make your credit card processing as smooth as possible. You may later find that you need to completely re-structure your account type, and with a good company this should not be a problem. Check your bank statements frequently, especially for the first three months to make sure you are getting all of your money.

That about covers everything, at least all of the basics of what to look for. Note, that I did not cover any actual fees. The processing industry is so dynamic that listing the fees would by frivolous, because they would have probably changed by the time you read this article. Check out several providers, and you will most likely find that they are all very similar. There is so much more information that could be written on the subject, and this just scratched the surface. Here is a short list of key points to remember before you make your final decision.

1. Avoid companies with high equipment prices or if they are pushing an equipment lease.
2. Make sure you understand every fee on the application.
3. Make sure you understand the length and terms of the contract.
4. Make sure you know what cards you will be able to accept.
5. Make sure you sign with a company that will assign a personal account manager for your business, and have a backup contact.
6. Make sure that you feel comfortable with this company handling your processing. This is your money, so you need to be careful who handles it.
7. Watch you bank account well and call your service provider first if you ever have to make a very large transaction.

If you ever feel unsure about a company stop, review, rethink, and make sure that you are going with the right company. If you have any questions about merchant accounts, fees, or anything related to credit card processing, please fee free to email me at jestep@enbs.com. I will be happy to give you unbiased consulting, and answer any further questions, and I'm sure that you probably have some.

Merchant Account Guide Part 1
Merchant Account Guide Part 2
Merchant Account Guide Part 3