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  1. #1
    He's No Good To Me Dead silver trophybronze trophy stymiee's Avatar
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    How to apply for an eCommerce Merchant Account

    (The following was something I posted in another thread that I think many of you will find useful).

    So, what do you need to sign up for an eCommerce merchant account? It's not just like signing on the dotted line. This is what you'll need to get that account up and running:

    Option 1) The ownership will have to have strong personal credit. Credit checks are done on the owners of businesses when an application is submitted. For online business, especially high risk ones, it's a huge factor. If the ownership has strong personal credit, you've overcome a big hurdle. If the ownership's personal credit is very strong you'll be fine.

    Option 2) The business will have to have strong financials. If this is a new business, skip the next paragraph. But if this is an established biz (at least a year but more like three or more) and it's got good financials (it has debts it pays on time and has a steady flow of cash) you should be fine.

    Regardless of which option you choose, here's some more of what you should be prepared for when applying for your account:

    - Be sure to have two forms of verification of the existance of the business (i.e. any document from the local, state, or federal gov't with the business name on it). This replaces the traditional photographs of retail establishments. This is how the bank verifies this is for a legitimate business.

    - Make sure you have a business checking account in the business' name. It's a must.

    - Have a (mostly complete) web site for the bank to review. If you provide a safe and secure place for your customers to shop, they'll feel better about accepting your application. Here's a checklist of an acceptable website:

    + Merchantís DBA name appears prominently on the web site
    The name of the merchantís business name (DBA) should be prominent and obvious on the website. Ideally, the DBA name will be at the top of every page and very clear. Also, there should be a correlation between the DBA and product(s) being offered. For example, if you plan on selling car tires, a good DBA name would be Bobís Discount Tires. A bad DBA name would be Maryís Flowers.

    + Customer Service phone number is clearly posted
    A customer service phone number is required for your customers to be able to call to ask questions. It should be clearly posted. Ideally it will be on every page and very prominent. It need not be a toll-free number.

    + Return/Refund policy is clearly posted? Your customers should be aware of how a refund/return is handled by your business. How long do they have to request a refund? Will they receive their form of payment back or will it be a credit only? Is it possible to get a refund at all? Even if your items can not be returned and you will never issue a refund, that policy must be clearly stated for your web siteís visitors to see.

    + Delivery methods and timing are clearly posted? How long from the time an order is placed can a customer expect you to ship your product/ deliver your service? How will you be shipping it? UPS? DHL? Fed Ex? Next day air? Ground? Mule? Make sure your customers are aware of how their order will be shipped and how long they can expect to wait for it.

    + Privacy statement is outlined
    How do you plan to use the information your visitors give you when they place an order? Will you use it only to complete their order? Will you sell it to a third party? Privacy is a concern of all web users. A privacy policy should be very clear and easy to read. It should be obvious and easy to find.

    + US dollars currency
    Although you may offer your products in any currency you wish, you must also display a price in US Dollars ($). The amount of the sale will be transacted in US Dollars.

    + Product offered is clearly described
    What exactly is a widget? If youíre selling them, a clear description of what they are must be present. If you can answer the following questions with a description, it is a good one: Who would use this product? What is it called? What does it do? How do you use it? Is there a warranty? What colors are available? What is it made of?

    + Page where credit card info is entered is secure
    Probably the most important checklist item. The page where a customer enters their personal information and credit card number must be secure. This means purchasing and installing a secure certificate on the web server. This will encrypt a customerís private information so hackers can not steal it while it is being sent to the web site. Most customers wonít place an order on a web site that does not have one anyway.

    If you are prepared when applying for your merchant account, you will almost certainly get it. Being a high risk style of business, it's key.

  2. #2
    SitePoint Enthusiast cdgcommerce's Avatar
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    That's some excellent information.

    Any merchant who follows the above and is prepared accordingly should be in a great position to get approved quickly by any processor.

    I will say that on the credit score side - even bad credit merchants can typically get approved. Only in extreme situations would it be a "no go" for most processors, but these criteria do vary significantly from one company to another so if you are concerned about your credit - definitely ask before applying.

    The most concerning type of credit is actually when there is none at all. I.e. when a processor goes to verify the SSN# and pulls credit - and nothing shows up at all.
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  3. #3
    ********* Addict jaiem's Avatar
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    A lot depends on the specific merchant processor. I know some people with less than perfect credit how got CC processing for new businesses (and the rates weren't bad).

    Shop around!
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  4. #4
    SitePoint Zealot
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    Good post!

    Mark

  5. #5
    SitePoint Zealot alexisb's Avatar
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    Hi, I've got a question. What about new companies? I mean, if you have just incorporated you don't have any credit history for the company right?

    My wife and I are thinking about incorporating at Delaware, we are non US residents, and wanted to know if we could apply for a merchant account and what were our chances of obtaining one.

    I know we would need a business checking account and we are seriously thinking about going with Valis. Yes, I know, it's very expensive but I don't know about other alternatives for our case.

    Regards!

  6. #6
    SitePoint Enthusiast cdgcommerce's Avatar
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    Well - if you are a non-U.S. resident, it is a lot more difficult to get a U.S. merchant account.

    Especially with the advent of the Patriot Act, most merchant processors will no longer approve anyone unless they are a citizen with an SSN#.

    For a U.S. citizen, however... you don't even need to setup a corporation, LLC or partnership. A sole proprietor with just a personal checking account can readily get approved for a merchant account.
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  7. #7
    SitePoint Zealot alexisb's Avatar
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    Hi Chris, well, you already know my case We are going the sole propietorship way and let you know in a few days.

    Thank you!


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