Having an Internet merchant account is an essential part of accepting credit cards over the Net. Here are some questions to keep in mind when setting out to open an account.
What documentation will the bank need from me?
The basic requirements for an Internet merchant account are having a commercial Web site and a good credit rating. But what exactly is required to prove your good credit, and whose credit is being checked – the principal owner’s or the business’s itself? (Or both?) Some banks require a thorough check of your business history and credit rating, which may require a great number of forms and a good deal of preparation. Before you talk to the bank, talk to your accountant to see if all your papers are in order, or if the accountant can produce them in good time.
How long is the application process?
Some banks promise they will have a response to your completed application in 48 hours. They can only make good on this promise if they have all the necessary documentation from you along with your application; otherwise, the process can take up to two weeks. If you want a quick turnaround, get an answer to Question 1 above before submitting your application.
How experienced is the bank with Internet accounts?
Even though the Internet is making inroads into society, not all banks grant Internet merchant accounts, and not all of those that do have the same level of experience. The bank is going to be looking at you; you should do the same with them. If you need to have your Internet merchant account with a bank other than the one where you normally do business, make sure your Internet merchant bank can transfer funds to your regular bank with no problem.
If I don’t already have a Web site, will the bank open my account?
You’ve already got a real-world business and are planning to open up shop on the Web. You want to get everything set so you can start taking orders. Is this realistic? Some banks might not want to talk to you until you have a live site up and running. With others, it might be a question of granting you an Internet merchant account, but not activating it until your site is up and running.
What fees are involved?
Ask to see a complete schedule of fees for all services. Some banks even charge application fees for Internet merchant accounts, regardless of whether they approve your account. In addition to the setup fee that all banks charge and the per-transaction fees (which can vary greatly), there may be hidden charges as well. Ask if there are extra fees for statements, wire transfers to a standard merchant account with another bank, fees for using certain clearance services, or other add-on fees that can make the account more expensive than it first seems.
Will my Internet merchant account be compatible with the other elements of my online storefront?
One of the most common problems with merchant accounts is incompatibility with transaction clearing services, also called “commerce engines,” and other elements of an online storefront. Shopping cart software, the clearing service, and merchant account must all be synchronized. Don’t assume anything. Make sure to pick a merchant account provider and a clearing service that are compatible with your software. If all elements aren’t compatible, you won’t be able to process transactions. A good bank will tell you if your account is compatible with the other elements, but it’s up to you to ask the right questions. Keep this question in mind if you decide to change your clearing service or software.
Can the bank help me reduce the risk of fraud?
Can the bank itself or any of its partners provide you with some means of reducing the risks inherent in taking credit cards over the Internet? Ask the bank what systems they offer or if they have a partnership with companies that provide address verification systems, a negative database of credit card numbers that have been charged back, or a more comprehensive suite of card authentication services.