How to Set Up a Merchant AccountTimothy2021-06-22T10:56:50+00:00
What is a high-risk merchant account?
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If you operate an online business that sells goods or services, you’ll need to process payments from your customers. With a merchant account, you can do just that. However, many business owners don’t know exactly how to set up a merchant account. Here, we’ll walk through the process end-to-end to help you find the best fit for your business.
How to open a merchant account: Overview
The process to open a merchant account can be summarized as follows:
Choose which payment networks to accept
Organize the required information about your business
Determine if you need a high-risk merchant account
Make sure your website is ready
Search for providers
Submit your application
If you understand what to expect as you go, you can make what could be an intimidating process seamless. With that in mind, let’s take a closer look at each step.
How to set up a merchant account step 1: Choose which payment networks to accept
Payment networks are the companies like Visa, Mastercard, Discover, and American Express that help facilitate credit card transactions. For many online businesses, simply making sure you can accept Visa, Mastercard, Discover, and American Express is enough. Consumers in most regions will likely use one of those four brands.
However, be sure to give this first step some thought before proceeding. Will a significant chunk of your customers prefer American Express, Discover, or some other payment network? For example, are many of your customers from a region where a different payment network is the norm (e.g. China UnionPay or Japan Credit Bureau)?
How to set up a merchant account step 2: Organize the required information about your business
When you apply for a merchant account, you will need to provide some financial data and information about your business. To make sure you’re prepared, we recommend getting this information together early in the process. Specific items you should be prepared to provide include:
Basic information on your business – Is your business an LLC, Corporation, Sole Proprietorship, etc? What country is your business registered in? Does your business require any special licenses? What’s your business’s website? What is your business’ bank account information? Make sure to have all this information readily available.
Regions you plan to sell to– The geographic location of your customers will impact which merchant account is best for you.
Turnover and processing history – Rates you are charged can vary depending on your business turnover. You’ll need to be prepared to provide financial information and card turnover data for the last year.
Price range of the items you will sell– What are the lowest and highest price items you will sell? This matters because high price items can make providers flag your business as high-risk (more on high-risk merchants below).
How to set up a merchant account step 3: Determine if you need a high-risk merchant account
There are a wide range of businesses banks and financial institutions may flag as “high-risk” and reject. Merchants can be classified as high-risk if any of the following applies:
Their business has poor credit
Their businesses is new
They sell high-priced items
They use a subscription sales model
They operate in industries with high rates of fraud or chargebacks
If your business is high-risk, you should use a high-risk merchant account from a provider with industry expertise. A provider that specializes in high-risk merchant accounts can increase your chances of approval and help you find an affordable and reliable payment processing solution.
How to set up a merchant account step 4: Make sure your website is ready
If you’re a business that is going to sell products and services online, you should already know the importance of a website. Your website is your face to the world and helps you generate sales and process payments.
However, when you apply for a merchant account there are additional things about your site you’ll need to consider. For example, you should make sure your website:
Has a unique domain
Gives a full description of what goods/services you sell
Provides your business’ full contact information and country of orgin
Lists customer service phone number and email
Details your delivery standards (e.g. carriers and time standards)
Displays what payment methods and credit card brands you accept
Is clear about the products/services you offer and their cost
Tells customers what currency you use (e.g. US dollar)
Publishes your return/refund/cancellation and privacy policies
Is secure (e.g. uses HTTPS connections)
Lists contact information for your web hosting services
These items are important because the major credit card networks have standards ecommerce sites must meet. If you don’t meet the standards, you may be unable to process payments.
How to set up a merchant account step 5: Search for providers
At this point, you’re ready to start searching for the right provider. If your business is high-risk, consider a provider that specializes in high-risk merchant accounts like TailoredPay. If you’re not in a high-risk industry, you might want to start your research by looking at your current bank.
Whatever the case: be sure to do your homework at this stage! Getting locked into a bad merchant services contract can cost you time and money. Check the terms of service and see what fees and rates the providers offer. Also, look at reviews from other merchants to get a feel for the provider’s reputation.
Beyond reputation, fees, rates, and contract details be sure to look at the services and features the provider offers. For example, does the merchant account provider offer payment gateways that meet all your business requirements? In addition to support for all the major credit card networks, be sure to think about features like website integrations and chargeback mitigation as well. Additionally, if you sell subscriptions, make sure your provider can easily support recurring payments.
How to set a merchant account step 6: Submit your application, wait for your approval, and start processing payments!
Now you’re ready to submit your application. This will entail filling out some forms, supplying some of the information you gathered earlier, and then waiting for approval. In many cases, you will get a response in 3 business days or less. If you’re denied, you may have to reapply with a different provider or work with customer service.
If you’re approved, you’ll be notified and will be able to start processing payments with your new merchant services account. For example, with TailoredPay, online payment gateways can be seamlessly integrated into your ecommerce site.
Are you a high-risk business owner? Let us simplify the process for you!
We hope you found this “how to set up a merchant account” walkthrough helpful! If you’re in need of a high-risk merchant account, contact us today at (888) 599-6482 or fill out our simple online application and we’ll get back to you within 24 hours. At TailoredPay, we specialize in high-risk merchant accounts and are capable of getting you approved for an affordable merchant account even if you’ve been rejected before.