Apply for a Merchant Services Account | How to Apply Online
A merchant services account allows a business to accept credit and debit card payments from their clients. Some businesses set up merchant services accounts through their bank, while others work with a company that specializes in in-person or online credit card payments. Wondering what you need to do to set up a merchant services account? Then, keep reading for an overview of the process.
Steps to Apply for a Merchant Services Account
- Prepare Your Information
- Obtain Your Federal Tax ID Number
- Apply for a Merchant Services Account Online
- Apply for a Merchant Services Account via Phone or Mail
- Collect 3 Months of Bank Statements
- Prepare a Voided Business Check
To ensure the application process goes as smoothly as possible, take some time to prepare your information. The exact information required by a merchant services provider can vary from company to company, but as a general rule, the company that handles your credit card processing will want to verify your identity and check your credit history to ensure that you can keep your account current.
By extension, you usually need to provide your name, contact details and social security number (SSN), and you also need to consent to a personal credit check. If the business has multiple owners, be prepared to provide this information for each owner as well as the percentage of ownership allocated to each principal player in the company. Additionally, you also need to provide information about your business, including business name, tax ID number or employment identification number (EIN), and checking account information.
If you don't have a tax ID number for your business yet, you need to obtain your federal tax ID number before setting up a merchant account. Referred to as an “employment identification number” (EIN), a federal tax ID is a unique number that identifies your business to the government. You must use this number when issuing tax forms or paying payroll taxes related to employees, but the number also comes into play for corporate tax returns, sales and excise tax returns, and multiple other federal tax returns related to your business.
Banks typically require you to have a federal tax ID number. They require these numbers for opening business bank accounts, applying for loans, and setting up merchant services accounts. In short, you use the same number for your business tax returns that you do when you apply for a merchant services account online.
When you need a merchant services account, the fastest option is to apply online. With an online application, you enter all your information into a secure web portal. Then, the merchant services provider reviews your details electronically, pulls a credit report if necessary, and follows up with any additional questions. Depending on the company you select, you may be able to get your account set up the same day.
However, timing can vary based on certain logistical elements. For example, if you are setting up a merchant services account to accept credit and debit card payments in your brick-and-mortar shop, you may need special equipment to swipe the cards, and you have to wait for that to be mailed to you. Alternatively, if you're simply setting up a merchant services account so that you can accept credit cards on your website, you may be able to apply, get approved, and set up the account on the same day.
If you don't want to apply online, you can apply for a merchant services account via phone or mail. In both cases, you should expect to provide the same information as you do with an online application, but you should also expect the process to take longer. Over the phone tends to be an easy option. Essentially, you talk with someone and answer questions, while they complete the application for you. If you apply through the mail, you have to account for the time delays related to standing in line at the post office, waiting for the application to get to its destination and getting a response sent back to you.
If you are already accepting credit cards and currently processing them through your bank account, you will need to provide three months of bank statements along with your merchant services application. Ideally, this bank account should be a separate bank account than your personal bank account, and it should be attached to your business name and federal tax ID number.
When you apply through the mail, you may be able to just print out three months of statements and mail them in with your application. Similarly, with a phone application, you may be requested to mail in copies of your statements. Often, when you apply for a merchant services account online, you can simply sign into your bank account and allow the online application to access your details directly through your bank account, using a one-time authentication code.
Finally, you must provide the merchant services company with information about your business checking account, and the easiest way to do that is to prepare a voided business check. The check should have your bank account and routing number written on the bottom of the check.
Some merchant services providers are willing to set up an account without a voided check. However, they will still need your account number and routing number. Without that information, they can't get the funds into your account. When people use their credit cards to make a payment, the merchant services company takes the funds, subtracts its fee (depending on the company, it can be a set amount or a percentage of the total), and puts the rest of the funds into your bank account.
You can find your business bank account number on your statement, and many banks also let you see your account number when you sign into your online account. The routing number is public. You can find it by calling your bank's customer service number or even by just using an internet search engine. The number is based on your bank and the state in which you opened the account.