Cash is King, but the new commerce has changed all of that and payment by card is today the order of the day. Any business, accepting payment in any other form than cash or cheque needs a dedicated account, in which credit or debit card transactions can be processed. This account is called a merchant account and only accepts payment with credit or debit card. When a customer pays using a card, the payment is deposited into the merchant account, which holds the money, until the transaction is processed by the payment processor and transferred to the business banking account, normally within 2-7 days after processing. There are three parties involved, the retailer, merchant bank and payment processor when payment is received from card transactions.
How to apply for a Merchant Account
Firstly it is important, to research and scrutinise the available offers, your bank is not always the cheapest. If needed get assistance to compare offers. Once this is done and you have made a decision, follow the steps to get a merchant-account:
Complete and submit your application. Ensure that all required documentation is attached. The acquiring bank will evaluate your application and apply their selection criteria to decide on your application. The time of approval vary between the different providers but on average it takes between 5-7 days. Once approved you will be allocated a unique ID number for your merchant-account and you can start accepting card payments.
Why Do You Need A Merchant Account?
The fact that the method of payment has changed and cash is no longer king, made card payments the new order of the day. Any business, whether new or established can’t afford to not accept payment with either a debit or a credit card. According to statistics, there are more than 37 million daily payments with either a debit or credit card. The forecast is that this will show positive growth in the next 8-10 years. Many customers feel safer when doing business and pay with a card instead of walking around with large sums of cash in their pockets. In particular, tourists who prefer to pay with their cards, instead of first having to change their currency.
Technology changed the business world and many retailers do business online, to receive internet payments they must have merchant accounts. Today, it is important to be able to compete and to do this in retail you must be able to accept payment in any form. Opening a merchant account will ensure that you remain competitive.