What is needed to open a Merchant Account?
Lets simplify the process and identify what is need to open a Merchant Account? Every merchant has different requirements but you can expect the following items. This applies if you are a corporation, LLC or a sole proprietor.
You will need Bank statements, sometimes up to 2 years. You might also need to provide processing statements in addition to your business bank statements. Merchant accounts will be able to see how much you typically process, as well as other relevant details about transactions. Learn more about What is a POS System?
In addition to business bank statements, you may also be asked for personal statements. Businesses and the people running them want to make sure that they are dependable. They check your credit and that of your business. Using a credit check, they can determine if you are financially dependable or a high-risk liability. A fraud check will also be performed. Banks are primarily looking for fraud risk.
Your merchant account application will require a physical address where forms can be mailed. If you have a brick-and-mortar business, this is the address of where your shop is located.
Employer Identification Number (EIN)
When you file for an EIN, this is what you use instead of your social security number when you file business taxes. Think of it like the SSN for your business. It’s a unique identifier that you use on financial, tax, and other legal forms. You can obtain your EIN immediately by going online.
Don’t have an EIN? You can apply for one with the Internal Revenue Service (IRS).
Articles of Incorporation
You’ll need to incorporate your business, either as an LLC, sole proprietorship, partnership, corporation, or cooperative. This makes your business legitimate and makes it official in the government’s eyes.
The article of incorporation is proof from your local jurisdiction that your business is, in fact, a business, as well as in good legal standing with the secretary of state. Go to your secretary of state website and file online or in person. It might take 30-45 until you receive your Articles of Incorporation for the Secretary of State.
PCI compliance is intended to protect customer information, requiring businesses to use specific security procedures when handling data. The Payment Card Industry (PCI) has Data Security Standards (DSS) that merchants and payment processors must follow.
While it isn’t a federal regulation, many states have laws around this, and merchant account providers also have their own requirements.
Different merchant account providers require different documentation from different businesses. Some potential documents you may also be asked to provide include:
- Voided check
- Business policies
- Inventory reports
- Marketing materials
- Business plan
It’s always best to check with them directly for your unique situation, as you might have different requirements for opening a merchant account.
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