17 Oct Why Are Merchant Account Applications So Long?
Merchant accounts are special bank accounts that businesses use so that they can conduct credit card payment processing. Such accounts hold the money from patron credit card transactions and then send them to the business owner’s bank. Any business that wants to accept credit card payments will want to have this type of account. To gain approval for a merchant account, a business owner must complete an extensive application. The provider will want to gain a snapshot of the company’s profitability, credit ranking, and types of transactions. The application for a merchant account is very long, and some applicants do not gain approval for the account. Some applications also cost the applicant a fee.
The reason the application for a merchant account is long is that the provider stands to lose money by taking a chance on the business. Therefore, the provider will want to know every aspect of a business, such as how many transactions it does on any given day, sales numbers, strategies to increase business, and more. The provider will want to be sure not only that it can make money, but that it will not lose a great deal of money for dealing with a company that does not flourish.
The company that is going to provide the merchant accounts will also need to be certain of the identity of the business owners. Therefore, the owner of the business who is applying for the special account will have to produce a driver’s license, social security number, and the business tax id number. This person will also have to provide the provider with bank account statements from all banks associated with the business. Additionally, the provider will want all the contact information and location information of the business.
The merchant account provider may ask extensive questions about the products the business is selling. The reason the provider may ask this information is to assess the risk. Certain products have a high probability of receiving customer chargebacks than other products have.
The best way to increase the chances of obtaining payment processing help is for the business owner to disclose all information the provider is requesting. Additionally, this person should also create a cover letter. Cover letters let the providers know that a great interest exists in the product. The cover letter should address issues that may come up, and it should express the positive aspects of conducting business.