The merchant account application review is a straightforward process that typically takes a day or two to complete, but more often than not it drags on for a bit longer, due to insufficient paperwork. Merchants are often surprised with the huge amount of documentation needed and are not always prepared to produce all of it at once. Also, there have been some recent changes in the list of requirements for new applicants, so I thought that a fresh overview is in order. As you process payments each month, the amount of processing volume you have available will increase day by day.
We need to understand that there is a high level of risk merchant providers and their partner banks take on when approving a new merchant. So why do chargeback occur. It occurs when customers dispute activity on their credit or debit cards and request their credit card provider issue a refund to them. And these refunds are debited against the merchant services provider and their partner banks, creating a lot of potential liability.
General Requirements for U.S. Merchant Account
All applicants for U.S based merchant accounts need to be compliant with the following general requirements:
- Legal presence in the U.S:Individuals are not allowed to set up credit card processing services. Foreign organizations are also excluded. Applicants must be either legally incorporated as businesses. Or they must be registered with the local municipality and obtain a “Doing Business As” (DBA) name.
- Physical presence in the U.S: All applicants must maintain a physical address in the U.S. that can be verified. A P.O. Box is insufficient.
- Have a U.S. bank account:The bank account into which the merchant would have their funds deposited must be set up with a U.S. bank.
Once these requirements are met, the merchant can proceed with the application process.
Provided your organization is qualified to apply for a merchant account,there are a number of requirements that will still need to be met.
- Application form:The application form will collect information about both your business and yourself, including address (personal and business), social security number, Tax ID (if applicable), phone number, email address, web address, bank account info, etc.
- Articles of Incorporation:You need to provide a proof that it has been legally incorporated unless you are a sole proprietor.
- Personal guarantee (for-profit organizations only):Sole proprietorships usually do not require a personal guaranty. A personal guarantee is required from the principals of all privately held businesses. Non-profits and public companies are not required to provide a personal guarantee.
- Personal financial statements:Usually requested in place of business financial statements. Personal financials may also be requested in addition to them. Personal tax returns for the latest two years are sufficient.
- Compliance with the PCI DSS: Compliance with the PCI DSS will ensure that account information of the customeris adequately protected.
- Voided check:You will need to provide a voided copy of a check for the bank account into which you will want your money to be deposited. The check must have your (DBA) “Doing Business As” name pre-printed on it.
- Business license:If your business activity requires a license, either a federal or a state one, you will need to provide it.
- Business financial statements:Unless your organization has been formed recently, you will have to provide its financial statements.
- Business and personal credit history: You need to provide your personal and business credit history
- Business profile and marketing materials: You are required to provide a description of all products and services they offer, as well as copies of all relevant marketing materials. The product type helps processing banks estimate the business’ risk type. Few business types of products and services will put the applicant business on the restricted merchant list while others may place it in the prohibited list.
- Processing statements:If you are accepting credit cards and are looking for a new service, you will be asked to produce your three latest processing statements.
- A site inspection:The processor may conduct a site inspection of the applicant business’ offices and warehouses is applicable. Exceptions to the site inspection requirement typically include:
- Health practitioners.
- Colleges and universities.
- Publicly held companies.
- Business policies:The merchant’s shipping , billing and return policies will be reviewed to ensure compliance with industry regulations. A representative of the bank processing the request may also place and then return an order with the merchant, as an extra inspection step.
- Extra requirements:In case fulfilment of orders is handled by a third party information should also be provided about this establishment and a site inspection will be conducted at its premises as well. The Internet Service Provider may also have its physical controls inspected.
IPayTotal WEBSITE COMPLIANCE
Please make sure that your website is compliant according to the VISA / MASTERCARD requirements.
Every merchant accepting credit card payments through the website (as well as MOTO-only merchants) needs to present a website that is fully compliant by Visa/MC compliance guidelines.
These will have to be fully completed before you can begin taking live payments, however if your website is perhaps currently still under construction and does not include all necessary items, you can still proceed with Precheck and Application stage, by providing an access to your beta website where the underwriter can review at least basic information on your products/services.
iPayTotal has a vast amount of experience dealing with High Risk Merchant Accounts, High Risk ACH processing, and High Risk merchant services and lot more. We leverage the best tools and technologies to create impactful solutions.
Even if you’ve been rejected as ‘high risk’ before, With our multiple bank partnerships – you are given the freedom to choose what solution is best for your business. iPayTotal enables you to perform transactions in the most popular currencies from around the world. Our dedicated team assists merchants’ by analyzing factors and facilitating dispute management and chargeback loss recovery.