What is a Merchant Account? And Why Do You Need One for Your Business?

Are You Leaving Money on the Table?

Without a merchant account, your business could be missing out on sales every single day. In today’s world, customers expect to pay with credit cards, debit cards, and digital wallets — both online and in-person. If your business isn’t ready to accept those payments, you’re not just behind; instead, you’re losing money.

In this guide, we’ll break down:

• What a merchant account is

• How a merchant account works

• Why your business needs one

• How to get started

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What is a Merchant Account?

A merchant account is a special type of bank account that allows your business to accept credit cards and electronic payments from customers.

To illustrate, think of it as the bridge between your customer’s bank account and your business’s bank account. It’s designed to securely hold funds for a short time, process payments, and protect both you and your customer.

Moreover, merchant accounts work behind the scenes to handle:

• Refunds

• Chargebacks

• Gratuity adjustments

• Payment settlements

How Does a Merchant Account Work?

When a customer pays you with a credit card, it might feel like the money just magically shows up in your bank account — but there’s much more happening behind the scenes.

Here’s a simplified breakdown of the process:

The Payment Flow:

1. First, the customer makes a purchase.

2. Then, the transaction info goes to your payment processor.

3. Next, the processor contacts the customer’s bank for approval.

4. If approved, funds move from the customer’s bank to your merchant account.

5. Finally, within 1-3 days, the funds are deposited into your business bank account.

Benefits of Having a Merchant Account

Getting a merchant account is about way more than just accepting credit cards. Instead, here’s what it truly means for your business:

1. Offer More Payment Options

Whether it’s credit cards, debit cards, digital wallets like Apple Pay or Google Pay, online payments, or recurring billing, merchant accounts make it all possible.

2. Increase Your Sales

Interestingly, data shows customers tend to spend more when paying with a card versus cash. Since it’s convenient, higher ticket sales often follow.

3. Protect Your Business

Additionally, merchant accounts come with fraud prevention tools that help you fight chargebacks, protect customer data, and avoid losses from friendly fraud.

4. Get Access to Payment Technology

For example, merchant accounts give you access to:

• Payment Gateways

• Virtual Terminals

• Online Invoicing

• Point of Sale Systems

• Ecommerce Integrations

5. Help With Business Funding

As a bonus, merchant account activity serves as proof of revenue, which can help when applying for business loans or financing.

What About Merchant Account Fees?

Of course, fees vary depending on several factors, including:

• Your industry

• Monthly sales volume

• How you accept payments (in-person vs online)

Typically, card-present transactions — such as in-person swipes or chip reads — have lower fees than card-not-present transactions, such as online or keyed-in payments.

By the way, if you need help understanding fees, Nationwide Payment Systems offers a free statement review!

How to Get a Merchant Account

Getting a merchant account is easier than you might think.

Here’s how it works:

1. Begin by filling out a pre-qualification form.

2. Next, speak with a payment expert about your business needs.

3. Afterward, complete the application & submit required documents.

4. At this point, underwriting reviews your application.

5. If approved — your merchant account is ready to go!

Notably, if your business is considered high-risk, don’t worry. Nationwide Payment Systems specializes in helping all types of businesses — even those declined elsewhere — get approved for merchant accounts.

Ready to Get Started?

At Nationwide Payment Systems, we help businesses of all sizes find the right merchant account solution.

➡ Contact us today for a free consultation!

➡ We’ll review your current processing statement, website, and procedures to help you get set up the right way — with full compliance, security, and transparency.

FAQ: Frequently Asked Questions