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Merchant Services: Frequently Asked Questions

5 min read

You may be planning to start as a merchant account services provider but confused about certain things. A whole lot of unreplied questions going through your mind. We bring to you frequently asked questions and their answers. We hope you find the answer to what’s bothering you concerning merchant services here. Below are commonly questions people ask and their replies.

What is a merchant account?

Simply put, this refers to a form of bank account that permits businesses to accept payments in different ways.  Usually through credit or debit cards.

What is the necessary procedure for me to set up a merchant account?

Setting up a merchant account requires application to a bank. You have to use an existing business account linked to the federal tax ID of your business. The business account and merchant account are separate. After that, your merchant account will then receive the card transaction and connect to deposit it to your business checking account.

What are the requirements for me to apply?

  • Firstly, you need someone to sign for you. Someone who agrees to responsibility for the account. However, such person must possess any government issued means of identification such as driver’s license etc.
  • Furthermore, you will need a bank letter carrying the name of your company, ABA bank number, your account number and a bank officer must append his or her signature.
  • In addition, you’ll also need an evidence of marketing material.
  • You may have to supply extra information like financial records and bank statements. This depends on the processing volumes you request.

What other prerequisite is needed to start making use of my merchant account?

If you have an organisation, the terminal of a credit card swipes the cards of your customers and navigates them via the merchant account. If the majority of the business is done online, there’s a need to get a payment gateway. This is a system of online processes for Mail Order/Telephone Order (MOTO). MOTO relates to transactions where there’s no presence of the physical card. Note that MOTO rates and Swipe rates will differ.

What makes a merchant account and a payment gateway different and is there a need for payment gateway?

The merchant account refers to the bank account that makes room for credit card transactions while the payment gateway relays credit card data from your business to your bank in a very secure method. As a result of the encryption, you need a payment gateway for securing important information.

When will I view the cash in my checking account?

As a result of differences in banks, batches of transactions and various card providers, it can be difficult to affirm. You cannot ascertain when you’ll see the deposits, but if you ask questions properly during the process of applying, you can guess when you’ll see your deposit. There’ll be cut-off times for processing of transactions. Just like depositing money in an ATM after hours. Processed transactions done after this is processed on the coming working day. If your deposit transaction is in segments, it can affect your deposits. Conclusively, deposit arrangements vary depending on the type of credit card.

Which payment processor should I select?

This does not have to stressful. Choosing which payment processor to utilize actually depends on a couple of factors. Choosing the right payment processor betters your business as it your customers with a good experience.

Firstly, you have to consider the capability of the platform to combine with other essential business tools. Integrated payment programmes help for a faster and more efficient method of making payments. Moreover, it must give you the liberty to access basic features to view and manage your business efficiently.

Furthermore, you also have to consider the cost of the payment processor. Charges of payment processors vary in their fees. Ensure you locate a merchant service provider that gives you a transparent and simple structure of pricing. This assists in not getting caught unaware with processing fees that are not expected.

What payment types should I give credence to?

It is a known fact that offering different channels of payment to your customers leads to an increase in generation of revenue. You should make sure your customers use an easy-to-use payment method as this helps in enlarging your business. The following are types of payment methods.

  • Mobile payments: These are payments are for services through the use of electronic devices like the cell phone or a laptop.
  • Contactless payments: These are payments using credit or debit cards, smartphones or any other electronic gadget utilising RFID (Radio-Frequency Identification) or near field communication. It makes payment safe and secure.
  • E-commerce payment: This is simply the buying and selling of goods online. This trend is ever growing.
  • Virtual terminal: This is a type of software application for merchants to allow payments using a payment card. This doesn’t require the presence of the card.
  • ACH payments: ACH is short form for Automated Clearing House. This type of payment method

How long does it take to start accepting card payments?

This actually depends on the size and how complex the business is. It could take from moments to about 2 days for an authorized merchant account. For bigger companies, it is necessary to carefully set up a merchant services account.

How safe and secure is credit card processing?

Businesses accepting payments using credit card must put in place safety measures. It doesn’t matter if there is physical acceptance of payments or through the internet. If the necessary safety measures are put in place, credit card processing is safe and secure. In addition, making use of the correct tools assists in minimizing risks which come with accepting a credit card.

There are many ways in which business owners can secure themselves from credit card frauds.

  • EMV compliance: EMV represents Europay, MasterCard and Visa. On the other hand, it is also known as a smart card. The microchip tech present has components for tight security.
  • PCI standards: This aim of developing this is to assist companies notice, act and stop future information leakages.
  • Use of tokens: This receives sensitive information and substitutes it with a series of characters connected to the genuine data by a permitted party.
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