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Start Your Merchant Application

If you want to start accepting credit cards, you will generally need to apply for a merchant services account.  This often involves a credit check to determine not only if you qualify for a merchant account, but how much you can qualify to process each month in payments.  If you have bad or no credit, there are still options available to you through a merchant services provider like  As you process payments each month, the amount of processing volume you have available will increase.


There is a high level of risk merchant providers and their partner banks take on when approving a new merchant.  Charge backs occur when customers dispute activity on their credit or debit cards and request their credit card provider issue a refund to them.  These refunds are debited against the merchant services provider and their partner banks, creating a lot of potential liability.

A person who's done a merchant application  and now has a POS

A person filling out a merchant application

Here are a list of items you will generally need in order to open a merchant account:

Corporations and LLCs:

  • A legal entity – You will need to have a legal entity set up for your business. This can be an LLC, C-Corp and so on.
  • EIN number – An EIN number stands for Employer Identification Number and is what the IRS uses to identify your company with.
  • Business checking account – This will allow the merchant service company to deposit transactions directly into your business checking account.

Once you have these three things, you can then start the merchant application process that your chosen merchant services provider requires.  Sole proprietors do not need these things, and instead can sign up using their personal name, Social Security Number, and personal bank account.  The next sections will talk about the underwriting process.

Sole Proprietors:

Sole proprietors do not need the three items listed above for Corporations and LLC’s and can open a merchant account under their personal name, can use a Social Security Number as their tax ID number, and can also use a personal checking account to receive deposits.

Things that can hurt your chances of getting approved for a merchant account

Due to the risk merchant account providers and their partnering banks assume when approving merchants for a merchant account, certain factors can make it hard to open a merchant account.  Some of these are listed below:

Bad Credit – This is by far the most common reason for a denial; however, there are merchant service providers out there like that work with merchants that other processors consider a bad credit risk.

New Companies – A brand new company newly formed is a much higher risk than an established company looking to change providers.

Expected Transaction Volume – If you apply for a merchant account and indicate that you need a high level of processing volume, your chances for obtaining a merchant account will greatly diminish.  The more volume you do, the more likely you will face a lot of charge backs and the more risk you will pose to the merchant services provider.  Only apply for processing volume based on your expected volume, be conservative, and only ask for the minimum you need.  If your volume picks up, you can always apply for more volume later.  Build trust with your merchant services provider and you can eventually get to the point where you can have virtually unlimited processing volume.

Average Ticket Size – On the typical application, the merchant services provider will want to know what your average ticket size will be.  If you indicate a high average ticket price, the chances of approval will be greatly diminished.  The larger transaction size means a higher cost if there is a charge back and more risk the bank and merchant services provider must take.


Getting a merchant account isn’t hard if you follow the advice we have offered and already have finished the things included in the “Getting Started” paragraph.  Once you get a merchant account, make sure you are staying on top of your customer service to minimize the number of charge backs that you have.  Keeping your merchant account in good standing is vital to the long term success of your business.  Failing to maintain good standing with any merchant service provider will make it much harder to obtaining a merchant account in the future.  Contact today to speak to one of our merchant service account specialists!