You’ve performed an exhaustive amount of research, performed your due diligence, and  …. drum roll please … selected the vendor to provide you with a credit card merchant account.  The question then naturally arises, “Just how do I obtain credit card processing capability?”  While the process may slightly differ among merchant account providers, there are common steps to take before a business owner can declare, “We accept credit cards.”

The first task in obtaining a credit card merchant account is to complete an application.  All credit card processing companies require the business owner to sign a contract or an application where the rates should be fully delineated.  It cannot be overemphasized that it behooves you to check that the fee structure quoted is accurately reflected on the form.  There is ample room for error so you must use your attention to detail skills.

The application should not take much time to fill out – less than an hour, assuming your children, if applicable, are not in the same room.  You will provide basic information about yourself and your business.  Most of the fields are self-explanatory although you will have to provide a little more self-disclosure than your name, rank, and serial number.  Specifically, the following information is typically requested: Your name and address, telephone and fax numbers, federal tax id and/or social security number, banking information, etc.

You will also complete a brief business profile, indicating the nature of your business, the number of years that you’ve been in business, the time frame in which your customer will be billed, when you intend to provide the product and/or service, trade references, and other business-related information.

Perhaps the most challenging question posed on the application relates to your intended monthly volume, average ticket, and highest ticket.  The figures that your write may be based on pure conjecture but it is always better to overestimate these amounts than underestimate them.  You should think of the processing volume fields as limits, and in order to prevent funds from being held on a given transaction, you should not exceed the specified amounts/limits.

You’ve now successfully completed the form (you should not have writer’s cramp), and you wonder what’s next in opening a credit card merchant account.  It’s time to gather the supporting documents.  You have to substantiate that you are … well, you … and that you own this business entity.   

You form a small search party to locate your Doing Business As (DBA) certificate or Articles of Incorporation.  This document always seems to be one of the most difficult to uncover.  Sole proprietors may not be required to obtain a business license, and may simply submit any of the following instead: Utility bill in the business name,   sellers permit, copy of the lease, or bank statements showing the DBA/legal name and address.

You’re getting closer to establishing a credit card merchant account but you have to remember that the funds from the transactions have to go somewhere – typically, your local bank.  If you have not done so already, you must open a business check account (or already have an accessible savings account, if you’re a sole proprietor).  Credit card companies will only deposit funds into US-based banks.  Some providers mandate that you have to open a bank account at their acquiring bank.

You’re “to do” list is just about complete.  You then fax, scan or mail the application with the supporting documents to the underwriting department for review.  As competition in the over saturated merchant account field continues to increase, the time it takes to assess an application continues to decrease.  It should only take one or two days before you declare, “I have a credit card merchant account!”

Of course, it’s not a sure bet that your application will be approved.  The underwriters will evaluate the nature of your business, your expected processing amounts, how you plan to accept credit cards (online or offline), and, most importantly, your credit score.  Assuming that your credit rating is favorable and that you run a business that is not on the prohibitive list (e..g, debt collection, telemarketing, etc.), it is highly likely that you will be granted credit card processing capability.

Thinking optimistically, you receive the good news that your application has been approved.  The technical support department then builds the necessary files, and subsequently, you will receive the mechanism in which to accept credit cards, such as a physical credit card machine, Authorize.net gateway, etc.

You’re now a full fledged, proud recipient of a new credit card merchant account.