Does Your Business Need A Merchant Account?
If you’re in the process of starting a new business, you’ve probably noticed the words ‘merchant account’ crop up occasionally. You keep hearing about them when looking into available EPOS systems and card machines, but do you actually need one?
Well, in short, yes. If you’ve any intention on accepting card payments, you’re going to need a merchant account. They’re a fundamental part of running a business and you can’t process card payments without them. Getting a merchant account should be one of your top priorities and it would be extremely unwise to think about opening your doors without setting it up first. Here at Business Quotes, we’ve got years of experience completing merchant account comparisons and we’ve learnt a thing or two along the way. Whether you’re opening a high street cafe, an eCommerce store or a food truck, we can help you find the right one.
What Is A Merchant Account?
In the most basic terms, a merchant account is a business bank account that allows you to process card transactions. They usually come with certain fees but also provide support services. In other words, if you don’t have a merchant account, you’ll only be able to take cash.
Whenever you make a sale, and the customer pays with a credit or debit card, the money doesn’t pass straight into your account. It needs to be authorised by the card providers first to protect you from fraud by ensuring the customer has enough funds available. A merchant account processes these transactions and essentially, acts as the go-between from the customer’s account to yours. The customer’s funds are deposited into the merchant account and then transferred to your business account, usually within one or two days.
Merchant accounts also mean you can take card-not-present payments. They allow you to take transactions over the phone or online. A merchant account is a must-have if you’re planning to open a web store. They can also include additional features, such as online reporting systems, that’ll prove beneficial if you’re starting a new company.
How Do I Get A Merchant Account?
There is a wide range of merchant accounts available on the market. Some high street banks like Barclays and Lloyds TSB provide them, but there are also independent organisations like Paymentsense and Takepayments.
When you contact these businesses and make an application, they’ll decide your eligibility based on three criteria: how long you’ve been in business, whether you’ve ever used merchant accounts in the past, and of course, your credit history. Before starting the application, you can make things easier by checking that your business information is up to date and the deadlines for when all your forms need to be submitted.
If this is your first business, they may take your personal finances into account as well. If you’ve experienced any black marks, such as bankruptcy, don’t assume they’ll decline your application. You may have to pay higher charges, but once your business is up and running and you’ve got months of healthy sales under your belt, you should be able to renegotiate the account fees.
There are over sixty independent merchant account providers in the UK, so researching all of them can be time-consuming. But that’s where Business Quotes come in. We have extensive experience finding the right business tools and can help you choose the best merchant account for you today. Start by checking out online comparison tool, and let’s see what we can find.