How to Obtain a Retail Merchant Account

How to Obtain a Retail Merchant Account

A retail merchant account enables retailers to process credit card and debit card transactions. Any payment processing that involves a card or bank account linked to one, takes place via a retail merchant account. It doesn’t matter whether the transaction takes place at your physical point of sale or eCommerce store.

There are many reasons why business owners decide to research retail merchant accounts. You may be looking for a new merchant services provider for your small business or just getting set up for the first time. Regardless of why you’re researching, we’ve got you covered.

This article has everything you need to know about how to obtain a retail merchant account of your very own.

What Is a Retail Merchant Account?

A retail merchant account is your business’s financial home. It’s the bank account that you use for credit card processing, debit card processing, and online payments. Your merchant account is the go-between for your business bank account and your customer’s card issuer. It all starts when your customer swipes, taps, or manually enters their card information at your POS systems or website.

Merchant accounts are most often used for credit card transactions (Mastercard, Visa, American Express, etc.). However, they also encompass mobile payments. That’s because touchless payment providers like Apple Pay store all your customers’ major credit card data on their phones. 

In fact, 51% of Americans are known to use some form of touchless payment. So you’re still processing their card information at your physical card reader or online payment gateway.

Retail Merchant Account_Touchless Payment_Infographic

Where Can You Get Retail Merchant Services? 

A lot of different entities are involved in the retail merchant services process. First, you’ll need a merchant bank.

Your retail merchant account is a bank account that, transfers funds into your business bank account once transactions are verified. But your merchant service provider is the one that interfaces between bank accounts and verifies funds to get your transactions processed. So, they’re the ones we’ll focus on for the purpose of this article.

Your merchant service provider should be an ISO, or independent sales organization, that’s registered with a large financial institution. This ensures that your payment processes are backed by the power of a big bank, rather than just a rogue startup.

Some ISOs have aggressive agents that will push you to sign a contract before you’ve done your research. Others have award-winning, hands-on customer service. So choose wisely. The agents you use will make or break the efficacy of your small business’ payment solutions when issues inevitably arise.  

PCI compliance is another important consideration. If your payment processor is not PCI compliant, it falls on you to ensure that your business operations meet strict protocols. This can be a recipe for disaster. If your business isn’t PCI compliant, you can be fined or have your accounts shut down without warning. It’s not worth the risk to go at it alone.  

Retail Merchant Account_PCI Compliance_Infographic

How to Obtain a Retail Merchant Account

There are a few crucial steps you need to take before setting up your retail merchant account. Let’s go through them in detail, so you’re set to go by the time you have to choose a solution provider.

1. Analyze your business needs

Your business type will influence the array of features you need from a payment service provider. If you run a physical store, you’ll need to look into what point of sale systems a potential solution provider offers. If you’re online-only, your payment gateway will be of utmost importance.

You’ll also want to assess what payment options your business needs. Swipe-only credit card processing is on its way out. Your (modern) customers will probably expect tap, NFC touchless, EMV, and mobile payment options.

The processing volumes, hardware requirements, and third-party integrations that your business needs should also factor into your decision-making process. Most payment service solutions are designed for a specific type of business. So you’ll need to have a frank conversation with the sales team to make sure the solution you’re considering is optimized for your unique needs.

2. Understand different pricing structures 

All pricing structures are not created equally. An interchange-plus or flat rate pricing structure will ensure that you won’t find any unforeseen charges on your monthly bill. However, there are a few other factors that impact what you pay for your retail merchant account:

  • Is it a card-present or card-not-present transaction?
  • Are you taking steps to combat chargebacks as they occur?
  • Did the sale take place at your credit card terminal or an online payment gateway?
  • Do you need the ability to process gift cards or touchless payments?

You’ll also want to ask about any additional fees­­––setup fees, terminal rental fees, etc.––they might charge. These extra fees can add up quickly to your monthly statement. So, ask about additional fees to ensure that you’re getting a full picture from your potential merchant services provider.

3. Compare providers

Finding the right retail merchant services provider goes deeper than price alone. You’ll also want to review these attributes before making a decision:

  • Pricing structure
  • Fees
  • Features
  • Security
  • Hardware
  • Integrations

You’ll also want to ask how many business days it takes for transactions to post to your business account. Do your research to see what type of customer support is offered. Finally, if you have a POS provider, like Clover, in mind, you’ll want to ensure that it easily integrates. Any solution you choose should integrate with your existing hardware and software.

4. Start the application process

The application process to obtain a retail merchant account is a bit complex. You’ll need to provide your solution provider with a few things to get started:

  • The name of your business
  • Your business and personal credit history
  • The length of time you’ve been up and running
  • Your contact information
  • Past financial statements
  • Your tax ID number
  • All business bank account and routing numbers

They’ll also evaluate your type of business, and whether it’s high-risk or low-risk. Next, you’ll need to register your business DBA with the right agencies. From there, you can get a business bank account and start weighing the processing rates of various providers. The right merchant account provider will offer interchange rates or flat rate pricing.

Most merchant account applications take around 2-3 business days to review before being accepted. However, many merchants wind up gathering the necessary data (as seen above) during the application process. This can result in significant delays.

Retail Merchant Account_Application Process_Infographic

A lot of payment processors claim to offer low-cost pricing. But, as discussed earlier, that’s not the only factor you need to consider. Define the terms and conditions you need, such as the refunds, privacy policies, and customer service being offered. Check how other retail store owners rated their offerings with the Better Business Bureau, as well, to ensure total transparency.

The Bottom Line

Payment Depot Highest Rated Processor_Banner

The provider you choose for your merchant account will have a tremendous impact on the financial success of your retail store. For the lowest processing fees and award-winning customer service, look no further than Payment Depot.

Our payment solutions help merchants like you save an average of $400 a month on credit card processing. Contact our customer service team to see how we can help your business excel today!

Want to save 40% on payment processing? Let's Talk!

"*" indicates required fields