FAQ
What is a merchant account?
A merchant account is an industry term referring to a business owner / merchant and a bank contracted to accept credit card payments. Establishing an account with a bank, Independent Service Organization (ISO), or Merchant Service Provider (MSP) allows you to process credit card transactions or electronic payments received from your customers. The bank, ISO, or MSP will deposit the sale proceeds into your business checking account, less the cost of the transaction.
How much does a merchant account cost?
Typical processing fees include per transaction fee, discount fee batch closing fee, monthly statement fee, and chargeback fee. Additional fees that may apply are application fee, termination fee, account maintenance fee, monthly minimum fee, and gateway access fee.
Most business owners generally try to find a merchant payment provider that offers the lowest discount rate. This fee is usually calculated as a percentage to hundreds (basis point) on the gross dollar amount of each transaction and is deducted from your deposit of credit card funds. In some instances, it can be more advantageous to have a higher rate rather than a lower one because the overall impact on an average ticket depends on the way a merchant account is set up.
What kinds of typical startup costs can I expect?
The establishment of a merchant account generally requires an application fee and a one-time setup fee. There are, however, instances when a merchant account provider will waive these fees as part of an advertising campaign or in conjunction with added services. Additional startup costs are determined by the type of account and services needed to accept and process payments. For example, a retail merchant account might need a point of sale (POS) terminal and supplies to accept credit and debit card transactions. Whereas, an Internet merchant account would need a payment gateway and some form of a shopping cart to accept payment from an online web site.
Why should I consider IPS for my merchant account?
IPS specializes in providing the most up-to-date technology and consulting that allow you to accept credit cards, debit cards, checks and many more payment methods uniquely tailored to your specific business and operational needs. We take pride in educating our clients and solving problems they may have had with payment processing solutions they’ve tried before. Our top-quality products are cost effective, easy to understand, and easy to use. At IPS, we deliver a single-source solution for “one-stop” merchant services. Our Technical Support Team is prepared to assist with even the most difficult conversion, and our live Customer Service Staff is accessible 365/24/7 to answer all your questions.
Does IPS require a contract?
Yes. We offer an Industry Standard, merchant processing agreement for both VISA and MasterCard, with the industry standard being the 3-year agreement.
How many merchant accounts can someone have? Will you charge me for a second merchant account?
We do not limit the number of merchant accounts that a business owner can have. Each account is subject to separate processing fees, monthly fees, etc. All accounts are based on specific underwriting criteria and are dependent on the types of products and services being sold.
Can I process for more than one business with my merchant account?
No. VISA / MasterCard rules and regulations prohibit more than one business processing on a merchant account. Keep in mind, however, that you can have more than one merchant account as long as the business name and tax ID are unique for each account.
Is having a merchant account the best way to accept online transactions?
The type of business that you conduct determines the type of merchant account needed. If you run a Store Front Retail establishment, you must have a merchant account that accepts point of sale (POS) transactions (the customer ‘swipes’ a credit card at the time of purchase). If you have a mail order or telephone order business, you will need a MOTO (Mail Order/Telephone Order) merchant account. A MOTO account is also used for e-commerce businesses that want to accept credit card payments.
How long does the approval process take? How fast can you set up my merchant account?
Upon receipt of the application and required supporting documents. The average timeframe for approval is 3 days for domestic accounts, and 3-4 weeks for International accounts. The setup and deployment of your merchant account will be within 24 hours of approval, depending on your integration needs and in-house technical capabilities.
Do you accept non-U.S. merchants?
Yes, in addition to U.S. domestic accounts, we also provide international merchant accounts for U.S. and Non US. Merchants. You must be a U.S. citizen to open a domestic merchant account. International accounts are available for those living outside the continental United States.
Do you decline any merchant account applications?
In order to receive a merchant account, a business must be approved by a Visa/MasterCard association bank. Each credit card processor sets a risk threshold for accounts that they accept and use specific criteria to protect them from fraudulent businesses. Because of our multiple banking relationships, IPS can place most types of business. Our criteria include (1) Current Processing (yes or no); (2) Business type; (3) Financial Backing/stability of the organization (Personal credit above 550 can normally be placed) (4) Any account that is currently processing will be considered unless on bank and card association exclusions list.
What are your fees and costs? Do you have any hidden fees?
A number of factors can have an effect on your merchant account fees and costs. For example, the rates are dependent on the Standard Industrial Classification (SIC or MCC code) and vary for different types of businesses. If a person uses VISA or MasterCard to pay for their purchase there is an interchange fee paid to the banks who issue the cards. Whether a card number is keyed into a swiped terminal or point-of-sale terminal can affect the discount rate as well . . . and the list goes on.
We do not have any hidden fees. Your monthly processing statement will be easy to read and understand. It includes detailed information such as (1) how much is processed a month; (2) what types of transactions are most frequently processed; and (3) what is paid to process those transactions. If you have questions about your statement charges, our live Customer Service department is available to answer your questions.
What are the underwriting requirements to open a merchant account?
Once your completed merchant account application is received, you MUST provide:
- Copy of signor’s government issued photo IDs
- Copy of voided check with business name on check OR copy of letter from merchant’s business bank on bank letterhead:
- Account name
- Account number
- Routing number
- Signed by bank staff member
If currently processing credit cards, merchant will be required to submit 3 or more months processing statements.
If customer is asking for more than $10,000 in monthly processing volume OR risk is considered high, the merchant may be required to submit the following:
- Copy of Checking Account Statements
- Copy of business license OR articles of incorporation
Upon preliminary approval, additional documentation requirements can be added at anytime prior to final delivery of an active merchant account, depending on the type of merchant and the risk level determined by the acquiring bank or processor.
I already have a retail merchant account. Can I use this for the Internet?
No. Retail merchant accounts cannot be used to receive payments for Internet payments. If you have a Store Front Retail business and want to sell your products on a web site, you will need to apply for an Internet merchant account. The difference between a standard-retail merchant account and a web-based merchant account is that the customer and credit card are not physically present. There is no assurance that the cardholder is initiating the transaction, thus making it riskier for the underwriting bank. As a result, you will pay a higher cost to accept credit cards online because the possibility of fraud is increased.
How do I apply for a merchant account? How long will it take my application to be processed?
There are two ways to apply for merchant accounts with IPS. Just click on the “Apply Now” button and you will automatically be taken to an application page. You may also contact us by phone to get the process started or fill out our online request for information. Once your application is completed and has been submitted to us, a sales representative will contact you within 24-hours to complete the application process.
What if my application is not approved?
First, we will partner closely with you to qualify you for a merchant account through IPS, regardless of declines or difficulties you may have experienced in the past. However, if for some reason you do not meet the necessary criteria there are other options available, and we will guide you through the benefits and requirements of each option available, including turn-key “third party” or “aggregate” solutions that shoulder for you some of the risk and fees. Keep in mind that the monthly fees will be higher, and some companies charge a set up fee and a per transaction fee. Our job will be to apply our skill, experience and contacts to match your needs to the most suitable, legitimate and cost-effective solution available.
