eCommerce

How to get a merchant account

August 26, 2020 4 min read

The merchant account setup doesn't have to be confusing and time-consuming. If you are missing out on sales because your company cannot accept credit cards or other payment methods, here is all you need to know about setting up a merchant account that will serve your needs.

Unlimint team
Your payment experts

Accepting online payments is a common practice these days. Yet, merchant account providers regularly deal with clients who have problems with opening a “merchant account” – a particular type of account that processes and accepts payments. There are lots of companies that get confused with the application stage and some of them even don’t follow through to completion.

But the point is, the merchant account setup doesn’t have to be confusing and time-consuming. If you are missing out on sales because your company cannot accept credit cards or other payment methods, here is all you need to know about setting up a merchant account that will serve your needs.

What is a merchant account?

The main reason entrepreneurs shy away from opening a merchant account is because they simply don’t understand what it is and how it works. We are not here to blame but to break it down for you. Here are the basics.

A merchant account is a so-called medium between your business, credit card networks, and a customer’s bank account. A merchant account provider enables a company to accept, process, and get the money via online or in-store payments. You can set up an account either with a local bank or a third-party service also known as Merchant Service Provider (MSP). The best option is to stick with a reputable provider instead of a bank as your business literally needs a “service” with necessary technologies, not just a middleman. 

Characteristics of a merchant account

Businesses typically think that a merchant account is just a storage place for the funds collected from sales. Except for that, MSPs can offer additional services that are necessary to see the bigger picture of your payments flow.

Merchant accounts provide clients with:  

  • Transaction tracking. The Dashboard allows you to track and check the status of all transactions, get turnover reports, important analytics, and tools for resolving disputes.
  • Multilayered access control. You can grant access to your team members depending on their roles and permission levels, including high-level managers, transaction managers, risk managers, and accountants. 
  • Secure access that involves two-step authentication.

You can experiment with real merchant account features by trying the fully functional Cardpay demo account.

When choosing your merchant account provider, you have to consider these very important aspects.

Which foreign currencies do you need to process?

There are endless use cases where multi-currency processing is a great advantage. One of the examples involves managing chargebacks and refunds. Imagine that you receive $100 USD from your customer who lives in Japan. In two weeks the customer decides to request a refund because of a product return. Sounds simple? Unfortunately, it’s not. The exchange rate for the Japanese yen can move down and although you refund $100 USD, the customer still gets less money. This situation can result in an upset customer and negative feedback.

An easy way to avoid this headache is to charge the cardholder in the local currency. 

With Cardpay you can choose among 178 local currencies to offer your customers when they visit your website.

Which alternative payment methods do you need?

Globally, customers prefer paying with credit or debit cards, but on the local markets, you may see that alternative payment methods (or APM) also come into the mix. After the rise of cryptocurrencies or cash payment methods, it’s no longer enough to have credit or debit cards in the portfolio.

Cardpay enables you to keep your options open using these APMs:

  • Wallets 
  • Cash payment methods 
  • Prepaid cards
  • Direct bank transfers 
  • Local cards
  • Mobile payments
  • Cryptocurrencies 
  • ‘Buy now, pay later’ instant financing 

What about the rates?

What’s more important: cost or service? We think both. Although we haven’t placed this factor first, fees play a decisive role in choosing a service provider. The costs for merchant solutions generally depend on several conditions: how risky your business is; how many transactions you have; and payment methods. As an example, fees will be higher for merchants that are most affected by chargebacks and lower for reputable companies with high turnover. Payment methods also change the fee rates so if you are thinking about cost optimization, we will help you choose the right combination of methods.

Cardpay clients can open merchant accounts for free and have an individual plan in which rates can be negotiated and adjusted to their needs.

How to open merchant accounts

As soon as you decide on the service provider, you can jump to the next step which is an application process. Even though the algorithm is quite simple, it still requires some time to go through the boarding.

Here are the steps you need to complete to create a merchant account with Cardpay:

  1. Submit an application form on the Cardpay’s website. After you complete the application form, we will evaluate your needs and regional characteristics to offer the best solutions for your business.
  2. Get a customized proposal according to the selected payment methods. At this stage, we negotiate terms and conditions and provide you with a commercial proposal.
  3. You accept the proposal. Cardpay will conduct smooth AML & KYC procedures upon receiving of merchant application. After the final approval, you have to sign the documents.
  4. Implementation stage and testing in Sandbox. 
  5. Going live. Once the required wallets are live you will get access to manage the Dashboard that contains transaction details, turnover reports, analytics, and comprehensive tools for resolving disputes.
  6. 24/7 support and monitoring.

As you can see, getting a merchant solution is relatively easy. However, configuring it in a strategic way requires understanding the markets you are targeting, awareness of costs and fees, and payment methods that will work smoothly for your customers.

If you need advice, please contact Cardpay as we can help you navigate these waters.

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