In setting up a merchant account, the applicant may have to provide some information to the account provider for credibility evaluation like the applicants personal or business details, personal financial statements, business longevity and financial strength, etc.
Setting up a merchant account isn’t easy as it seems it is. Finding the best merchant account provider that best suits the business is not as complicated as the process and the approval of the merchant account application. The acquiring bank in which the merchant account application was issued may have to make a deliberate examination of the business and principals of the applicant. Applicants may have to submit some documents or to relay sensitive information about their business. The reason for this is to prove to the account provider that the applicant’s business is worthy and is able to sustain all the conditions in having a merchant account. Below is a list of documents/information that an applicant should meet:
Merchant account application
This form will hold all the details of the applicants and his business. It is here where addresses, telephone or fax numbers, email or website address, social security number, bank account information, etc. are written.
Personal financial statements or tax returns
The applicant’s financial statement will show how well he handled his past financial transactions like loans or credits. It is also here that the account provider will be able to tell if the applicants have past bankruptcies or liens issues.
The applicant’s length of time in doing business gives assurance to the merchant account provider that he fully understands the elements in which business operates. The applicant is also already keen to the many risks or potential problems that he may face with business and that he knows how to handle them from the knowledge he gained from his business experience.
Business bank account or an earlier merchant account
If an applicant had a previous merchant account that is well-maintained, it is a good indicator that he handles his account well. Terminated or a lot of chargebacks in a former account will have a negative impact in acquiring another account.
Business financial strength
A good business financial background assures that it is capable to stand up amidst many financial crises or problems and will be able to hold on in the long run.
Location and inventory/products being sold
There are locations that account providers many not be able to cover. The products being sold in the business and the inventory reflects how the business is doing.
Business monthly volume and transaction size
The business’ monthly volume and transaction size will tell the account provider the average financial transactions of the business. They may have to impose a limit on the amount of transactions to the applicant’s merchant account
Business registration or licenses
This proves that the applicant’s business is registered and legal to operate in the state where it is located.
The business plan is the blueprint of the business. It is where the terms, policies and the development or growth of the business lies.
Return, exchange or refund policies
In business, sometimes customers complain of some merchandise problems like defects and it is always their right to ask for an exchange or refund. An applicant should provide the business’ policies regarding these issues since when the account provider will approve the merchant account, they will also be ones to handle refunds or money returns.
The information listed above is crucial in obtaining a merchant account. All the applicant should do is to acknowledge them with honesty and as much as possible should have very good ratings in any of the above required documentation or information needed by the account provider in order for the merchant account to be approved.