Small Business Merchant Account

What is a small business merchant account?

A small business merchant account works the same way as a regular merchant account. A regular merchant account works to provide businesses with a way to accept credit cards and debit cards, for (usually) low per-transaction fees, and monthly service fees. The credit cards and debit cards are processed by being swiped through (or having their information typed into) a credit card processing machine, often referred to as a credit card terminal. In the case of a small business merchant account, the only real difference is that it is an account reserved specifically for small businesses.

Who is eligible for a small business merchant account?

Anyone that owns and operates a legitimate small business is eligible for a small business account. A small business is defined as a business that is independently owned and operated, and a business that is not the dominant in its field in its particular geographical location. There are some other stipulations as well, but these generally refer to any business and person wanting a merchant account, not just those that are for small businesses. Generally, so long as you have a legitimate small business, you will be able to apply for and be approved for a small business merchant account, so that you may accept credit cards and debit cards as payment methods.

What terms should I know when getting a small business merchant account?

Your settlement time is the time between when a transaction is processed, and when you actually receive the funds from that transaction into your account. Monthly fees refer the monthly fee you are charged for the upkeep of your account. Reserve funds is a percentage of money kept back by the merchant account provider each month as a means of insurance. In the event of having more refunds than sales in a particular month, or some other monetary issue arise, these kept back funds - the reserve funds - would cover those expenses. Finally, a processing limit is how much money you can take in with your merchant account each month.

What else should I know about a small business merchant account?

As with any type of merchant account, know everything there is to know about the provider of your small business merchant account. Familiarize yourself with small business merchant accounts in general, and the terminology associated with them. Ask your merchant provider for a copy of the contract, and any rules, regulations and general guidelines they can offer you. Know exactly what you are being charged and for what. Look carefully for any hidden costs and fees. And finally, if you have any questions, feel free to ask. It is, after all, YOUR money that is on the line!