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How to Get Approved for an Online Merchant Account

You are planning to apply for a merchant account, but are worried about your odds. The screening process is intended to mitigate the risk of providers, who essentially agree to cover the amount spent by the consumer in case you default on providing goods or services. So, they are usually careful about vetting their merchants.

Obtaining a merchant account can be easy or difficult, depending on your specific circumstances and the processor in question. However, there are some ways in which to better ensure the success of your application. Here are some tips that will help you look good when applying:

Get your credit in order ahead of time

Getting approved for a merchant account is a lot like getting approved for financial products as an individual: having good credit matters a lot. Thus, you'll want to avoid any unnecessary, risky expenditures immediately prior to your application. You'll also want to pay off any outstanding debts and get any liens cancelled to show that you are responsible with your funds. Take a bit of time, if possible, to accrue some good credit after you have taken care of the negative aspects.

If you've got a good processing history, flaunt it

Some processors will require this anyway, but providing three months of statements demonstrating positive payment processing is always a good idea. In fact, you can provide more if the records reflect solid, reliable transactions consistently. These will serve as proof that you will be a conscientious client to your merchant account processor.

Write a cover letter

One of the most proactive moves that you can make when applying for a merchant account is to write a cover letter. This should state your intentions and what kind of business you run or intend to run, highlight your advantages, address any risks that you foresee, outline your credit history, and cover any other pertinent information. In addition, you should talk about why you believe the payment processor would be a good fit for your business and vice versa. This introduction to your business and modus operandi should pave the way towards an open discussion about your prospects and hopefully, to your approval for an account.

Choose the right processor

Choosing the right processor for your needs and particular type of business is absolutely necessary, not only for your initial approval, but for your future business dealings. For instance, if you are in the travel industry, there are certain processors who may be reticent to approve you for an account. This is because travel is considered somewhat risky due to the longer fulfillment durations (i.e. the time between purchase and delivery of a product or service). Since booking hotels, flights, tours, cruises, rental cars, etc. happens weeks and often months before a trip, cancellations are much more likely than with a normal order for products.

Thus, you'll need to do your research ahead of time to find processors who are friendly to your particular industry. To continue with the travel example, a processor in this business should be able to handle online payments, offer international accounts, and strong fraud protection.

These are some simple ways to ensure that you are not only approved for an account, but that you find the right online merchant services for your needs.