The “What’s” and “How’s” for a Merchant Account

By: Jeanette Mendiszabel

Many merchants experience a sense of trepidations when searching for a merchant account. Questions regarding credit history, types of merchant solutions needed, and estimated credit card sales; make a singular objective evolve into a gauntlet of hurdles. Hopefully this article will help clarify what is a merchant account and how to obtain one.

A merchant account is an account that enables a merchant to fulfill the act of processing credit card orders. The act of processing credit card orders is a tedious process between the patron’s credit card company, the machine/gateway used, and the credit card processor while funds are ultimately deposited in a merchant’s account. The time frame of funds deposited is normally a 2-3 business day event (depending on the merchant’s bank).

The typical facts required from a merchant service provider are as follows:

(1) A voided check – a processing company must know where to deposit funds. A sole proprietor can use a personal check. However, for all others, a business check is needed. (Note: if a permanent check is not available, a bank letter stating merchant name, account number and routing number will suffice).

(2) Verification of address – for all retail shops (including home based) proof of a physical address is needed. This can be provided with a utility bill, or third party mailing to support the name and address. Post office boxes are not accepted and generally frowned upon as a physical address.

(3) A copy of a picture i.d. – whether a driver’s license, passport, or any government issued license, this is necessary to confirm the merchant’s signature.

(4) A copy of promotional material – this is normally the case for home based or e-commerce merchants. This can be either a business card, flier, or (for e-commerce merchants) the first page of the website. Note: For e-commerce merchants, refund policy and contact information has to be visible on the site.

A very important note: High risk/high volume merchant accounts usually demand additional information (ie: 6 months bank statements, 2 year tax returns, and articles of incorporation). A listing of examples of high risk merchants will be provided at

Once a merchant decides how he or she will process credit cards, the next step is to pick a terminal. Though there are some companies that provide free terminals, there are a “slim few” that provide free terminals for merchants with challenged credit.
The reason is simple. Once a machine is provided, who is to say it would be returned if a merchant closes his doors?

As for merchant service providers, sometimes free is not the best alternative. There is currently a growing trend among MSP’s where antiquated and out dated equipment is given for free. In addition many companies are providing free equipment only to merchants who process in excess of $5,000/a month in credit card sales. The end result, you may get a machine that has to be replaced within 6 months or you are not eligible for a free terminal if you are a “start up” or you have less than perfect credit. A reference link to resolve these issues can be found at

In the meantime, keep your eyes peeled for future articles about high risk merchant services and pricing your accounts. I hope this was helpful for you. Until next time, I pray we’ll meet again.

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Jeanette Mendiszabel is a representative of Alegre Merchant Services. This article is written to resolve some of the common questions she has encountered while servicing her clients through her numerous years of service. Know more about merchant account at

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