Merchant Account Questions
Q. What is a merchant account?
A merchant account is a relationship with a credit card processing bank, that allows a merchant to accept and process credit cards. The merchant account will allow the merchant to swipe their customer's credit or debit cards through a credit card terminal, or will allow the merchant to manually key in transactions. Merchant accounts can be set up in the name of an individual or by a corporation. Each location of a business with a single ownership must have its own merchant account. And, each website set up by a merchant that either has a different name or sells different products needs to have its own merchant account.
When setting up a merchant account, the merchant will specify what method they plan to use for obtaining information from their customers credit or debit cards. This determined method will also determine the cost that the merchant must pay to process their customers credit cards. The lowest cost for processing would be swiping customer's cards through a credit card terminal. Keying in transactions or processing over the internet has a higher cost than swiping through a credit card terminal due to the higher risk associated with this method.
Q. What are the requirements for a merchant account?
To setup a domestic or US based merchant account a merchant must have a physical location within the US and an American checking account. Once these conditions are met a merchant can apply for a domestic merchant account. If these conditions cannot be met a merchant must use an offshore merchant account.
Application Requirements for all businesses:
- Physical Location in the US.
- Checking account with an American bank in the name of the business or the merchant account signer.
- Explanation of business type (ie: LLC, Corporation, Sole Proprietorship, etc.).
- Federal Tax ID Number (EIN).
- Owner or Merchant Account signers SSN.
- Owner or Merchant Account signers address information.
- Product or Services being sold information.
- Exchange and Refund policies.
- Intended method of accepting transactions (ie: swipe, internet, keyed, etc.).
- General business location type (ie: Shopping Center, Home Based, etc.).
- Copy of a voided check from merchants checking account.
Additional Requirements for some businesses:
- Marketing material (ie: business card, brochure, advertisement, etc.).
- State or Federal Business License.
- Proof of business existence (ie: phone bill, utility bill, etc.).
- Proof or financial stability (ie: profit and loss statements, bank statements, etc.).
Requirements for all internet businesses:
- Active website with DBA of website listed on application.
- Product delivery methods and timeframe clearly stated on website.
- Product prices in US dollars.
- Privacy Policy listed on website.
- Customer Service telephone number listed.
- Secure checkout system.
- Domain name registered to merchant.
Q. How long does it take to get approved and setup?
The time that it takes to get approved depends on the type of business and the intended method of processing that the merchant is planning on doing. The times listed are based from when our company recieves an application.
Retail Businesses (Swiped Transaction):
For retail businesses it is common to get an approval within 24 hours or even on the same day. Including programming the terminal and shipping to the business, the total setup time is around 3 - 4 days.
Internet and Keyed Entry Businesses:
Internet businesses usually take 2 - 3 days to get approved and an extra day to get the payment gateway system programmed. This is also assuming that the merchant's website meets all requirements, otherwise a conditional approval may be granted until the website is fully setup. The total setup time is around 3 - 4 days.
Wireless Processing Businesses:
Wireless businesses are considered the same as a retail business except the terminal will take an extra 1 - 2 days to setup the terminal on the wireless network. The total time to be setup is 5 - 6 days.
These times do not include any pending issues or the requesting of additional information, which is uncommon but does happen for some applications.
Q. Do I need to have great credit to get approved for a merchant account?
Personal and business credit are factors that are used to qualify a business or individual for a merchant account. Every merchant account application will include a credit check of the business and the person signing for the merchant account. Perfect credit is not a requirement for opening a merchant account, but a better credit rating can help speed up the application process. The only time that credit becomes an issue when opening a merchant account, is if a merchant has an open bankruptcy, or has been terminated from processing in the past.
Our company processes through five domestic processing banks which enables us to provide services to nearly any business, regardless of past credit history.
Q. What is AVS?
The address verification system or AVS is an electronic system that verifies the address of the card holder during a credit card transaction. This system is commonly used in internet based and keyed in transactions where the card is not being swiped through a credit card machine. This system can verify the billing zip code of the card holder and if setup properly can verify the street address and sometimes even the telephone number. The merchant gets a response that the AVS is approved or declined and can then chose to run the transaction or not.
AVS should always be used for every internet and keyed transaction to avoid downgrade charges and fraud. Even if you can verify who your customer is, if you are setup as a keyed or internet account, you should use AVS for every transaction
Q. What is CVV, CVC, CV2?
CVV is a card verification system that verifies that a cardholder is in possession of a credit card by verifying a set of numbers that is embossed on the credit card and not encoded in the magnetic strip. This way even if the card number is stolen, a transaction cannot be processed if the purchaser cannot verify the cvv number on the card.
Requiring CVV in addition to AVS can help to eliminate most fraudulent orders for internet and keyed entry businesses.
Each card issuer has a different name for the CVV system, but all are essentially the same thing. Visa refers to it as CVV2, Mastercard is called CVC2, Amex is CID.
The CVV number is located on the back of the card except for most Amex cards where it is on the front. Amex also uses a 4 digit verification code whereas all other card makers use a 3 digit number
We offer several options that will allow you to process credit cards through your website. These services will integrate with your website to allow real time transaction processing, and also include a virtual terminal that will allow you to manually process transactions through a secure website.
Payment Gateway and Virtual Terminal Options:
- Authorize.net
- Our co-branded gateway
- Verisign Payflow Link
- Verisign Payflow Pro
If you are interested in adding a credit card acceptance option to your website, please look at our internet merchant accounts page.
Q. What if my business is not based in the US?
We cannot accept non US businesses for our domestic merchant account services.
The requirements for a business to be able to process through a domestic merchant account are an American bank checking account and a physical location in the US. Once these requirements are met, a business can apply for a domestic merchant account.
