A merchant account, also known as a merchant services account, is an arrangement that allows business owners to accept credit card payments. As the credit/debit card payment industry becomes bigger, more businesses are adding this service to their existing accounting packages.
The first step toward setting up a merchant account is contacting your bank or financial institution and asking about their merchant services. In addition to requesting information about fees, you will have to present a business plan that outlines how your business plans on using the service for your customers. This step is important in determining what kind of processing system may be appropriate for your company and it also serves as a final check against any potential problems you might not have though of.
Once your merchant services account is activated, you will be able to accept credit card payments on your website and in person. Be sure that you can offer privacy protection for all customers who pay with a credit card. According to the Privacy Rights Clearinghouse, California residents are protected by some of the strictest privacy laws in the nation. Those laws include the Information Practices Act of 1977, the Rosenthal Fair Debt Collection Practices Act, and The Song-Beverly Credit Card Act.
The Privacy Rights Clearinghouse also offers other helpful links that are not specific to California. For example, they have a list of credit card issuers’ websites for each state as well as links to additional resources such as the FTC and Consumer Action.
The final step in setting up a merchant account is paying for your merchant services. This fee will be either a flat rate or an additional percentage on top of each transaction. Keep in mind that there may also be monthly fees and some accounts require minimum monthly charges.