Things to Know While Setting Up Merchant Account To Accept Card Payments

Updated on November 22, 2021

Accept card payments

Customers are mostly comfortable with cash-less transaction these days. Over the years, credit/debit card payments have increased significantly. Now, if you are about to accept credit/debit card payments from your customers, the first step is to get a good merchant account. This would really help you when you upgrade to mobile payments in near future.

However, setting up a merchant account and getting the payment processing equipment certainly mean additional expenses for small businesses. This is why many SMEs mostly stick to cash & check payments. But while it might save them some costs and keep the payment processing simple, in the long run, that would mean losing out on a huge chunk of customer base.

As mentioned earlier, modern shoppers mostly prefer card-based payments. So, even though card payment processing is slightly more complicated compared to traditional cash & cheque payments, it is still safer and assures a wider reach to the maximum possible client base. Thus, smart SMEs are increasingly taking to debit and credit card processing services nowadays.

The post below briefs what you would need to know while setting merchant account for your business.

A sneak-peek into merchant services

In simple words, a merchant service account allows a business to accept debit & card payments. You can easily sign up for the merchant services at financial institutions like banks. Otherwise, you have specialized merchant account service companies or private sales organizations to help with card payment processing. A good lot of SMEs usually prefer a merchant service company over financial institutions as the former also helps with the card processing equipment. You can either buy or lease it from them. Then, they would even allow you to register for both merchant account and Online Merchant account and accept almost all kinds of debit/credit cards and also extend many additional services like telephone, mail & mobile services.

Banks for merchant account

As mentioned earlier, you can open a separate bank account with your bank to register for its merchant account facilities. When you have it in association with the bank, the account will mark an agreement among your bank, the payment processor company handling the card transaction & the related retailer.

Now, merchant accounts are not always granted to start-ups, home-based businesses and minor ventures. However, some banks might still approve the old clients that have been into business with them for some time. But then, banks will get a thorough evaluation of the business before approving the merchant account. Your business has to be in the market for a minimum of 2 years to be eligible for merchant account with the bank.

However, bad credit is a serious glitch here. Banks particularly demand a good credit report to approve a merchant account application and any application with a score below 580 would be outright rejected. So, if you are looking forward to secure your merchant account with your bank, focus on fixing your credit score first.

Independent card payment processing organizations

If your bank does not approve your merchant account application, check out independent card processing companies. You will find their contact details in your dear old Yellow Pages and local telephone directory under “Merchant Services” or “Credit Cards” section. One of the best things about independent card processing companies is that they readily accept businesses with poor credit and also high-risk ventures.

However, fees would be higher here compared to that of the banks. So, get a good comparative study on 4-5 such companies to land up with competitive rates.

Online Merchant Accounts

Online Merchant Accounts are mandatory for those into e-commerce ventures. As the name says, these merchant accounts are especially designed to process debit or credit payments online for the virtual stores. There are various internet payment processing companies to help you here or else banks and independent card processing organizations too offer online merchant accounts. If you have already got a regular merchant account for your physical store, you would still need an online merchant account for a virtual outlet.


Whether you are going for an online merchant account or a regular one, make sure to do a market survey first. Ask out different banks, talk to multiple independent card payment processing companies and carry out a proper research on at least 3-4 online merchant account companies. A thorough comparative study would give you a solid idea regarding various fee structures so that you can pick the most compatible one for you. Most of the shoppers today prefer versatile payment options and will generally vouch for the stores offering multiple payment modes.

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