Merchant Account Application Requirements

Provided your organization is qualified to apply for a US-based merchant processing account and has received an acceptable payment processing proposal, you can commence the application process. There are a number of requirements that need to be met and, to understand why the process is so stringent, you need to understand exactly what is it that you are applying for. A merchant account is a form of line of credit that a merchant processing bank is extending to the applicant. When you accept a transaction, your merchant account bank will "acquire" it, usually at the end of the day, and will automatically deposit the payment amount, after subtracting the interchange fee and its own processing cost, into your checking account. At the same time it will submit a request for payment to your customer's card issuing bank. Your merchant bank will pay you before it gets paid. That is the reason why they have set in place an application process, designed to establish the credit worthiness of both the applicant organization and its principals. Following is a list of requirements that you will have to meet:

• Merchant Account Application. You will provide in this form details about both your business and yourself, including address (business and personal), social security number, tax ID (if applicable), phone numbers, email address, web address, bank account info, etc.
• Personal Guarantee (for-profit businesses only). All new businesses and a great many established ones are required to provide a personal guarantee before establishing payment processing services.
• Articles of Incorporation. Unless your establishment is a sole proprietorship, you will have to provide a proof that it has been legally incorporated.
• Business License. If your business activity is regulated and 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 (typically it is required that you produce financial statements for the two years preceding the application date).
• Personal Financial Statements. Typically requested in place of business financial statements, personal financials might be requested in addition to them. Personal tax returns for the latest two years are typically sufficient.
• Processing Statements. If you are currently processing credit cards and are looking for a new service, you will be asked to produce your three latest processing statements.
• Voided Check. You will need to provide a voided copy of a check for the bank account that you want your money to be deposited into. The check has to have your "Doing Business As" (DBA) name printed on it. If you have not yet received your checks, you will need to provide a signed bank letter stating your account details.

As you see, there are quite a few requirements for applicants to accept credit and debit cards and it is by no means certain that you will be approved. Still, if you provide the needed paperwork and have decent credit history, chance are that you will get your merchant account service.