An Overview Of Merchant Account
With the advent of digital payments, customers no longer carry around wallets full of cash or stash a chequebook.
Debit and Credit Cards are the most used forms of payment in most businesses. If your company does not accept these cards, you may be losing a growing customer base.
While accepting card payments are necessary for business, they cannot collect payments through their Personal Account. Enterprises require a Merchant Account, which serves as a bridge between the user’s Bank Account and your company account.
What is a Merchant Account?
It is a type of Business Account that enables companies to accept electronic payments made with Debit or Credit Cards and electronic wallets such as GooglePay, PhonePe, PayTM, and others. This account serves as a conduit between the swipe of the card and the deposit of funds into the account. It enables businesses to receive funds for transactions immediately than waiting for customers to pay their Credit Card bills.
Are there any fees involved with the account?
Some fees are associated with a Merchant Account. However, they vary from one account provider to the other. All prices and additional charges are listed under the agreement. Therefore, read through this section to understand what fees your company will most likely incur. A setup fee is standard and gets charged by many providers. It is a one-time fee that you must pay when setting up the account. Besides, many providers do charge:
• Monthly service charge.
• Transaction fee for foreign or online transactions.
These fees have an impact on your cost-per-transaction. Hence, when you collect payments, ensure to factor them into the overall cost of a vendor.
What are the documents required?
For opening a Merchant Account, you need the following:
• Business Account
• Business license
• Financial statements of the specified months
• Current residential address
• Employer identification number
• Articles of incorporation
Besides this, you also need to produce supporting documents such as:
• Business plan
• Business policies
• Marketing materials
Document requirements differ between banks, and therefore, contact your bank and adequately check the list to ensure that you have all the necessary documents and submit them appropriately. You can do them online as well.