To enable your business to accept credit cards online, and to process transactions immediately, you need to have access to a merchant account. It is an easy, cost-effective way to process credit cards online. Hence, the first step is to get a merchant account, a service offered by nine banks – known as acquiring banks. Also there are processors that currently offer Internet merchant accounts. There would be nothing better than your existing bank offering merchant account services, but you may approach any other bank for the same as well.

Today, merchant account providers promise their potential customers of being able to set up and have a merchant account ready for use within one day. However, that is mostly a marketing gimmick. A merchant account takes a minimum of 24 hours and that too when the process is very speedy. Following a merchant submitting his application for a merchant account, there are several steps that it must go through before it is ready to process credit card transactions. These steps are as follows:

Step 1.

The application for a merchant account is submitted to a bank or the ISO’s application department.

Step 2:

The application is reviewed and checked for any missing information. If any details are missing, the merchant may be asked to submit another application or furnish complete details.

Step 3:

The application is also verified through the provider’s manual underwriting system.

Step 4:

Depending in several risk factors, an instant approval may be received at this point.

Step 5:

In case of no instant approval, the application takes it’s place in the underwriting department queue for it’s turn to come.

Step 6:

The application is reviewed by an underwriter. The underwriter can approve the application, decline it, or request additional information.

Step 7:

If additional information is required at this stage, such as utility bills, the same is resubmitted to the underwriting department.

Step 8:

Once the application is approved, the ISO will setup the software, payment gateway, or credit card terminal for the business to process with.

Step 9:

The merchant account is set live, allowing a merchant to process credit cards.

As is apparent, the back-end process of setting up a merchant account takes a considerable amount of human or manual work. A single fault can result in the merchant account being stalled for a long time. It does sound like a good idea to have an automated system in place to facilitate merchants as well as banks and to speed up the process. The main reason for not implementing such a system is fraud prevention. No computer algorithm can beat the human mind at fraud.

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