Managing payments is a challenging aspect of doing business, especially when you’re just getting started. It’s a good idea to get a Merchant Account once you’ve opened a business bank account. Why? Because if you don’t, you might not be able to accept credit or debit card payments. However, what is a merchant account? Use our guide on setting up a merchant account for small company owners to learn everything you need to know.

What Basically Is A Merchant Account?

A merchant account is an account into which funds from processed debit and credit card purchases are sent. Along with payment gateways and payment processors, it is a critical component of the payment process. You will not have direct access to the account while you possess it. Instead, funds in your merchant account are moved automatically to your company banking account within 1-2 working days.

So, why should you register a merchant account if you can’t get your money? It’s straightforward. You won’t be able to accept credit or debit card payments from your consumers unless you have a merchant account. 

Why do small businesses need to set up a merchant account?

You should try to accept as many payment options as you can as a small business owner. If you only accept cash, you can find yourself turning away potential customers. If you have a merchant account, you’ll be able to accept credit and debit card payments online and in person. Additional tools that merchant accounts offer, such as check processing services or online reporting options, may help you launch a small business. There are also merchant accounts that offer services to ensure that your account stays PCI DSS compliant, helping you to maintain the security and protection of your customers’ transaction data.

How Small Businesses Can Set Up A Merchant Account?

Opening a merchant account is simple, but do your homework to find the best supplier for your small business. Each supplier will have unique features, cost structures, and contract provisions. Pay close attention to the costs involved and contrast the services provided by various providers.

The next step is to set up your merchant account after selecting your provider. As well as your routing and account numbers for the business bank account where you want to accept your deposits, you must submit your business name, contact information, and tax information.

How Do Merchant Accounts Function?

After opening a merchant account, you can begin accepting credit and debit card payments. Here is a step-by-step explanation of what to anticipate:

1. Accepting payments 

A card reader is required for in-house payments; these are often provided by your payment processor. Customers will only need to provide their card information if they are selling online.

2. Payment processing 

Following the acceptance of payment, the card information of the customer is transmitted from the card reader to the payment gateway and then to the payment processor. Prior to being transferred to the customer’s bank, the information is first sent to the card network. When there are enough funds in the account, the transaction is authorized, and the card reader receives a confirmation.

3. Payment collection

This is when a merchant account is useful. The funds will be deposited here by the client’s bank and held here until they are transferred to your company’s bank account. There is typically a downtime of between 24 and 7 days, also referred to as the “settlement period.”

Setting Up A Global Merchant Account

You might want to think about opening an international merchant account if your small business has its sights set on international growth. You will be able to accept credit and debit card payments from clients all over the world as a result. Since you can open international merchant accounts anywhere you wish to grow your business, this is a smart strategy.

We Are Happy To Assist.

Radiant Pay enables you to automate payment collection, reducing the amount of administration your staff must handle while pursuing invoices. Look at the impromptu payment options and recurring payment options we offer.
Radiant Pay is committed to providing you with payment processing services that are uniquely tailored to your business needs. We help our merchant partners accept a variety of payments from their customers, including credit cards, debit cards, bank transfers, online direct debit, and real-time bank transfers. Additionally, we provide assistance with offshore merchant accounts, high-risk processing, processing checks, and ACH transactions.