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Find a Merchant Account for Start Up Businesses

This article will review how to find a merchant account for start up businesses, and what to look out for in terms of fees and monthly payments.

Merchant Accounts for Start Ups

Even most small businesses today accept payment by credit card. The ability to process cashless transactions is widely considered a must by big and small business alike. For online operations this is necessary, but with more people becoming reliant on credit and debit cards, even the smallest store needs to offer a choice of payment methods to maximise sales.

More than half of all UK purchases are currently made using a credit or debit card. Companies that deal in cash only run too heavy a risk of losing out to their competitors in today's cut-throat business world.

In order to process both credit and debit cards, you need to obtain a merchant account. This type of account differs from a normal bank account in that it acts as a type of go-between from a customer's card at the Point of Sale and the company from which it was issued.


Regardless of whether they are Visa, Mastercard, American Express or any other, all cards are processed electronically by a card reader linked to the Merchant Account, which then streams the information accordingly to the appropriate financial organisation. Providing the transaction is accepted, payment is then forwarded via the merchant account to the Point of Sale. The customer's account is debited and the sale is complete but the transfer of funds back and forth is not instant. The entire process, from start to finish, takes an average of three days.

Finding a Merchant Account Supplier

Although finding a merchant account should be relatively simple, setting one up can sometimes prove difficult.

Banks may ask for a fee in advance and are often slow in processing applications. New businesses, particularly those that are web-based, tend not to be trusted and a bank often takes much convincing when it comes to projected turnover and the possibility that the company they are dealing with might become a victim of fraud.

It helps to be well versed in this department. Being aware of the possible pitfalls regarding electronic theft, then proving you know how to combat them through the use of internet security, will ensure you are taken seriously from the start. It will almost certainly help if you know someone who has been successful in a similar venture and can act as a mentor or referee on your behalf.

It may also be advantageous to apply to several banks. Even if more than one application is successful, many merchant accounts do not cost anything until they are used and if one bank knows another is interested, your bargaining power will increase. However, for new businesses, the setting up of a merchant account may be swifter through a web-based provider.

Merchant Account Charges

Once a merchant account has been set up, you will have to pay a one-off or monthly fee in order to maintain the account. This could either be a one-off start up payment, a variable monthly fee, or a small percentage on each transaction made.

However pricing and fees can be complex. Pay particular attention to the pricing structure and ensure the sales rep can clarify the exact amounts entailed so that you are clear what you are signing up to.

Next Steps

If you are interested in hearing more about getting a merchant account for your start up business, then fill out the form at the top of this page.