Most of the time, when you visit a department store, a shopping center and other businesses to purchase something, you will be asked on how you are going to pay for the product/service, is it going to be cash, debit card or credit card? This is not a very unusual scenario because many businesses offer the customers with payment options for their convenience. And these businesses use a merchant account to make this possible. By definition, a merchant account is a type of bank account that is usually used by businesses for the purpose of accepting payment from their customers through debit cards or credit cards. Providing the customers with these options will really be convenient for them knowing that many people use debit and credit cards instead of cash. This may also increase the sales rate of a particular business. So if you are planning to open up a business, you should really consider setting up a merchant account with a particular bank.

To open up a merchant account, you should open up a business checking account first. A checking account with your desired bank or financial institution is necessary in the process of setting up a merchant account. There is also a need for you to get a valid Employer Identification Number and a valid business name. If you already have these things, you can then proceed to apply for a merchant account. You can either do the application process online or on the actual bank/financial institution. Fill out the application form and have it submitted. It would be better and faster of you are going to set up a merchant account with the same bank where you’ve opened a checking account.

You also need to be prepared with all your personal information, licenses, permits, financial statements and other important information related to your business. You will surely need all of these in the application process. You also need to provide the bank account information of your bank like the routing and account number. After the application process, you can then pay the fees. Normally, you will be required to pay a certain amount to open up a merchant account but the amount depends on how big your business is or its nature. There are actually 2 types of fees that you need to pay in having a merchant account – the fixed and variable fees. The fixed fees refer to the amount that you have to pay for the application, monthly payment for the account and the annual fee, if there is. The variable fees on the other hand will the amount that you have to pay which varies from time to time, month to month in particular. This will be determined on how often you use the service.

Although opening up a merchant account is associated with some fees and charges, these are nothing compared to the benefits that will later on enjoy upon operating you business. This is basically because many people would prefer to deal with a business that offers them some choices when it come to modes of payment rather than those that only consider cash.

Author Bio: Stephen Mcmilla enjoys writing for CanadaCardProcessing.com which offers merchant services and Debit Machines as well as a host of additional services.

Category: Business
Keywords: merchant account,bank account,checking account,credit cards,business checking account