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What is a Business Merchant Account?

A business merchant account is a facility whereby an acquiring bank grants a line of credit to a Merchant (a business) who wishes to accept payment card transactions.

Without such a facility a Merchant cannot directly accept payments by credit card.

The alternative to opening a merchant account with a bank is to establish the agreement through a Payment Service Provider (PSP), in this case the merchant account is held by the PSP.

Some of the benefits to opening a merchant account through a PSP include:

1. The PSP will fully manage the technical connections, relationships with the external network and back accounts.
2. The PSP will provide the merchant with weekly reports giving details such as the number and volume of transactions processed, chargeback and refund information as well as offering support with any general queries the merchant may have.
3. The PSP will usually have links with several different acquiring banks throughout the world so this enables them to offer more varied industries e.g. the high risk sectors such as pharmaceuticals, online dating etc

How can I open a Business Merchant Account?

To open a merchant account the merchant must complete an application form which provides the bank / PSP with all the relevant details about the type of business they are looking to process.

Some of the details that will be required in the application include:

- The Merchants website address (URL)
- Details about the Company that own the URL including Directors and Shareholders information
- Company bank details. This is to allow us to carry out any relevant credit checks.
- URL requirements e.g. shipping policy, confidentiality assurances etc
- Technical specifications e.g. server technology
- Any previous payment processing details
- Customer support policy
- Details of the product(s) that is sold through the URL

Once the bank / PSP have received the merchants completed application form and all the relevant supporting documentation the application is submitted to the relevant department at the acquiring bank for final approval. The approval process usually takes between 3 – 5 business days.

What will be the charges relating to the Business Merchant Account?

The fees charged by banks / PSP’s will vary depending on details like the number and volume of transactions processed, the currencies involved and the industry the transactions relate to.

Most banks / PSP’s will usually base their charge on a percentage of the volume of the transactions as well as applying a fee against any chargeback’s and refunds that may be received.

Others charges that may be applicable include a minimum monthly fee that ensures that the merchant processes a set volume of transactions, this allows the bank / PSP to cover its self in respect of maintaining the account.

A transaction / authorization fee is sometimes applied, this is normally a small charge made against each authorized transaction.

Ultimately every business that wishes to accept card based payments online will require a business merchant account. While these can be acquired directly through a bank more and more businesses are realising the benefits that handing the technical payment handling over to a dedicated payment service provider can provide.