Selecting the Right Merchant Account Provider

Selecting the Right Merchant Account Provider


The difficult part of setting up an online payment system is picking the how to sell credit card processing, which may seem unclear at first. I met with everyone in my hunt, from salespeople to bankers, and I now have a collection of contracts with extremely small type. I put together a rundown of the procedure, cautionary tales, and price comparisons. Hope this was helpful.



  1. Customer submits payment information into our secure site (also known as the shopping cart or checkout).
  2. The Payment Gateway receives the payment information for approval.
  3. The transaction is forwarded by the Gateway to our Merchant Bank.
  4. Our Merchant Bank sends the transaction for verification to the Credit Card Issuing Bank.
  5. The credit card company checks the transaction and replies with an approval or denial code to our merchant bank.
  6. The response is forwarded to the payment gateway by our Merchant Bank.
  7. The findings and answer returned to our online store are stored by the payment gateway. The customer sees information about payments, such as “credit card was charged,” “credit card was rejected,” etc.

This process takes only a few seconds to complete.



The majority of banks use the First Data Corporation network for how to sell credit card processing. About 80% of all credit card transactions are cleared by the FDC network. Providers of Merchant Services (MSPs). In this post, I’ll refer to them as Vendors. MSP has several bank affiliates and a third-party account database, which results in greater approval rates than banks (especially if your business is considered high risk).

  • MSP will recommend the solutions or bundles that work best. • Better prospects of negotiating lower rates and contract terms with vendors than at a bank, which has limited options.

What are the specifications? Depending on the supplier and the level of risk they are willing to accept, requirements change. Only Tax ID or SS #, a business bank account, and an address were required, three merchants informed me (which is not completely accurate). I then learned that the vendor submits our application to the underwriter, who will then ask for more details before approving it. Most underwriters will want the following information on both the application and the website:


Business & Applicant Information:

  • Business license (Tax ID) or DBA (SS#) • Checking Account • Address • Principal’s driver’s license and contact information • Credit check – for new businesses, the individual’s credit history is a deciding factor
  • Service Provider Alternatives Alternative payment methods like Amazon FPS, Google Checkout, and PayPal are gaining popularity among new small enterprises. These businesses offer packages that work with the majority of business models, are easy to use, affordable, and allow you to get going quickly.


Rates and Ratings

Examine the small print. The banking institutions and payment gateways are shared by all vendors. The market is both fiercely competitive and wealthy. Markups on the fees and additional service costs are how they generate revenue. In our conversations, a couple of the reps from the vendors would only mention the extra prices upon request. One representative advised me to carefully read the contract, but until he receives my application, he is unable to offer me the contract or talk about charges.

A particular card type may be subject to varying charges and rates (MC, Visa, AMEX, Discover, personal, business, and rewards card). This is known as qualified vs. unqualified cards in the business (unqualified having the higher unadvertised rates of course). Pay close attention to your contracts, especially the footnotes.

What’s crucial? Remember that prices are not fixed and that most businesses require 30 days’ notice before changing prices. It is more crucial than the costs to find a service provider with a good track record, flexible policies, excellent customer service, and round-the-clock technical assistance. A reputable vendor will be transparent about their business and would inquire in-deathly about your operation.

Fresh Business Suggestion For such a business with unknown sales volume, the per transaction rates may not make a difference early on. For a few months, I might use PayPal or Google Checkout in order to gather sales-related data. There is extremely minimal risk and out-of-pocket expense because there are no startup costs, no monthly fees, an immediate sign up and usage process, and little development time. The only drawbacks are the potential perception of not being as “professional” and the fact that customers will be diverted away from your website during the transaction. That being said, flexibility and easiness are the way to go till you understand your volume.

Leave a Reply

Your email address will not be published. Required fields are marked *