May 4, 2011
Let’s quickly go over what a Merchant Account is.
A Merchant Account is a bank account designated specifically for online business.
How do I open a Merchant Account?
Easy! Go to your bank and ask to speak with a banker. Request information about Merchant Accounts for online businesses and he/she will guide you through the necessary steps to get one.
How much does it cost to open a Merchant Account?
Some banks may have a minimum balance to open your Merchant Account for the first time. Beyond that, there will be transaction fees that you will need to cover depending on the amount of transactions a month. Transaction fees may vary but you can expect to pay around 3.5% per transaction.
Is there a minimum number of transactions per month?
No, but there might be a minimum monthly fee for the Merchant Account. Ask your banker about minimum monthly fees.
Is a Merchant Account the same as a Payment Gateway?
No. A payment Gateway is a third party software that links (integrates) your Shopping Cart and your Merchant Account. The money goes through the Payment Gateway and into your Merchant Account after it has cleared.
Is there a waiting period to get approved for a Merchant Account?
Yes. Usually the bank will want to look at your online store before approving your application. They will be looking for Privacy Policies, SSL certificates during checkout, offensive or adult content, and other criteria. Ask your banker for a checklist and give it to your developer or webmaster to make sure everything is ready before the audit.
Do I have to pay transaction fees on the Merchant Account AND the Payment Gateway?
The short answer is Yes, BUT ask your bank if the have any special agreements with Payment Gateways as they very well might and that could save you money if you bundle the Merchant Account with their preferred Payment Gateway.
Do I need to integrate the Merchant Account with my online store?
No. You only need to integrate your Payment Gateway with your Merchant Account. The Payment Gateway gets integrated with your online store.