How to Apply for a Merchant Account

The merchant account application process starts with the filling up of the application form from the merchant account provider. The form is usually available online or, if you're applying in a local bank, the form is available on site. Independent service organizations (ISO's) have less rigorous application requirements than banks so they will normally allow you to sign a pre-application form after which they will call you to authenticate a few facts on your form. The application package is sent immediately (either on the same day or the next day). The application does not last very long and your merchant account can be set up in a few days.

Banks on the other hand require documents to go along your application. The requirements usually depend on your estimated sales for a month. If you anticipate sales of $5,000 or less, you will be required to present a valid ID (usually driver's license), a voided check with the company or business name on it; if the business is online, you must provide the URL of the website as well as copies of the website showing the products you sell and their respective prices. Your business license or your DBA, as well as refund and delivery policies must be found on the website.

For anticipated sales more than $5,000 but less than $17,000, the above mentioned requirements still apply but the business site (if the business is not online) should be inspected. A good credit rating is a must. For expected sales greater than $17,000, the above mentioned requirements have to be submitted together with existing business financials and personal and corporate tax returns for the past two years.

After submitting the requirements together with the application, the bank will assess your eligibility based on the product that you're selling, the number of transactions to be processed at a certain time (usually for online businesses) and your credit rating. After approximately 48 hours, you will receive a response from the bank indicating whether your application has been approved, denied or you are being offered certain revisions in the deal (or additional fees may be asked from you). If your application is approved, your merchant account is immediately established. If you are denied, the fees that you paid will be refunded except for the processing or set-up fee.

The bank will be more than willing to talk to you and discuss their reasons for denying your application. They can even help you find ways on how to increase your credit rating and set-up goals for yourself so that you will be granted a merchant account in due time. An offer indicating a change in transaction fee, a payment of a reserve fee or a guarantee from an additional guarantor may be proposed to you. If you accept the proposal, your merchant account will be established. If not, the fees that you paid may or may not be refunded.