In this rapidly transforming world, where businesses are regularly changing their process of dealing with customers. With the development in processes, the businesses now have started accepting the payments through credit cards. Although, of all the business process up-gradation with the help of technology, that ease the maintenance of business, accepting card payments is one of the step that makes easier for customers to pay directly through their account.
But, many times merchants who are planning to start accepting card payments have very less knowledge about what is required for the establishment of a merchant account. As there are few requirements and perquisite for getting and maintaining a merchant account that enables business owner to collect payments via credit cards.
Typically a merchant never directly contact to a bank for the merchant account initiation that should collect the card transactions. The reason for this there is a strong need of dealing with fraudulent and error transactions that needs to be handled with the guidance of professionals. For a merchant account that collects card transaction, the merchant should contact a processing company that acts as an intermediate between merchant and bank. They help merchant to deal with the card transactions effectively and help them to get funded from the bank against the legal transactions.
For merchants in United States, we have listed the requirements of the account application that can help them to be ready with all sorts of documents that will help them to apply with correct documents while filling the merchant account application form:
All the merchants who are based in U.S. they need to provide the general requirements that are listed below that will help merchant to prove that she/he is a legal resident of United States:
- Registered business name in U.S.: The merchant account applicant must be legally incorporated in the U.S. or at least merchant registered its business with the local governance that could give them “Doing Business As” name (DBA).
- S. bank account: The merchant should have a running U.S bank account, in which the merchant will get the funds of their transfers deposited.
- Physical address of merchant: A merchant must have a physical presence that is an address of living or doing business that can be verified.
The above document will help a merchant to show their legal presence in United States, if a merchant have the above necessary proofs, they can apply in the bank for a merchant account that can help them to collect payment through credit cards.
Now for filing the application for merchant account the documents will vary with the businesses risk volume, that is categorize with the dependence of these factors including nature of business, monthly processing, previous processing experience, etc. Although, the basic things a merchant needs to fulfill while applying for the account is:
- Application Form: The application form that will collect the basic information of the business and applicant. The information include physical address, Tax ID, average sales, bank account details, web address, phone number, etc. There is an advance pricing agreement that is regarding the pricing of the products.
- Business license: The applicant’s business requires any kind of permit before being sold; the applicant needs to provide the appropriate license copy at the time of application.
- Incorporation proofs: if the applicant claims that their business have the existence in all over the world, then there is a requirement of providing/submitting the copy of incorporation paperwork, that proves that business is illegible to collect payment from around the world.
- Voided check: The applicant needs to submit the voided check of their business bank account, with the business name pre-printed on it, this is called permanent check. If the permanent check is not available, then the merchant will need to submit a letter from the bank stating the account details and have the bank authority signature on it.
- W-9 form: This is an application form for Federal Tax ID. It’s not possible the form can be substituted with the SS-4 form with which a merchant can obtain the Tax id.
- Personal guarantee: The processor tries to be safe from the risk of debt that occur form the fraudulent action that is the undeniable part of card payment transaction. Personal guarantee is basically required by the privately held companies due to the nature of business.
Other than the document, the businesses that are listed in higher risk categories, needs to provide these addition details about their business:
- Business financial statements: Normally the details of last years of business transactions are required.
- Personal financial statements: Again the details of last two years of personal account details.
- Processing details: If the business has previously accepted the card payments, then at least of last three month of processing of payment details needs to be share with the processer.