Small Business Owner: What is a Merchant Account? Why do I need one?
What is a Merchant Account? Why do I need one?
If you want your Montgomery business to thrive in today’s competitive market, you need to accept debit and credit card payments. Considering that about 70% of the US population carries a credit or debit card—40% of which is likely to use it to make purchases, you are leaving a lot of money on the table if you are not accepting card payments! Before you make plans to cash in on the huge segment of card users, though, you need to set up a merchant account.
What is a merchant account anyway?
A merchant account is essentially a middleman that offers you the hardware, software, and support you need in order to safely and timely accept credit or debit card payments from your customers—whether online or in person.
For the uninitiated, here’s how a merchant account works:
As mentioned before, a merchant account serves as a “middleman” between your business’s bank account and your customers’ bank accounts.
When a customer pays through a debit or credit card, the merchant account works behind the scenes to collect the money from their bank account, hold it until the card issuer and the payment processor approve the transaction, and then deposits it directly (after a fee deduction, of course) to your business’s bank account during your settlement process (every 2-3 business days or every week, for example).
Merchant account for online businesses
With the digitization of just about everything, the credit card processing industry has also extended its reach to online businesses. As an online business owner in Montgomery, AL, you need to have a merchant account in place more than brick-and-mortar stores. After all, it is not feasible for you to accept cash or checks through your eCommerce website.
However, the type of merchant accounts available to your online business will differ from those for traditional brick-and-mortar businesses. These include direct merchant account, local merchant account, offshore merchant account, high-risk merchant account, and third-party merchant account.
How to get a merchant account?
To obtain your merchant account, you must apply and be approved. With the application, you will be required to submit some supporting documents for underwriting purposes. These may include a scanned—completed and signed—merchant application, passport copies of the owner(s), company incorporation papers, current utility bills, latest 6-month credit card processing history, and latest 3-month bank statements.
CardKnox Merchant Account Services
The future of integrated merchant account payments, today. CardKnox is the leading, developer-friendly payment gateway integration provider for in-store, online, or mobile transactions – hassle-free. CardKnox is great for small business! Apply for a merchant account with CardKnox today!
Make sure to check out our article about our partnership: "Tommy House Studios Partners with Cardknox"
The bottom line
If you want to accept debit and credit card payments from your customers (which you do!), you must have a merchant account. Refusing to do so can cost you customers who are expecting the ability to pay with a card—which, as mentioned before, are almost 50% of your total customers!
Are you looking for a credit card processing partner that can set you up with a merchant account easily so you can accept card payments in no time? Get in touch with Tommy House Studios today! If you want to harness the full power of payment processing, call us at (334) 310-2915 or contact us online.
