What Is an Internet Merchant Account?


Any modern online store accepts bank cards. If you intend to start your own business, you need to know how accepting and processing payments work. One of the most important aspects of accepting payments from debit and credit cards is a merchant account. This is a special account opened for each online store before connecting payment services to it. Let’s talk in more detail about what a merchant account is, how it works and what you need to pay attention to before opening.

What is merchant?

Literally, the term “merchant” means a trading company that operates online or offline, where you can pay by bank transfer. However, the literal meaning is rarely used today. Now the term “merchant” refers to a set of financial services that are necessary to accept non-cash payments from bank cards, electronic wallets, etc.

What is a merchant account then? It is a special trading account that is opened to accept cashless payments. It is to it that all funds received as a result of payment for goods or services are credited. Merchant accounts allow you to receive electronic payments 24/7, both on weekdays and on weekends or holidays.

The bank where the merchant services account is opened is called the acquiring bank. This financial institution is responsible for accepting payments and processing user information and also assumes all risks associated with this account. The bank charges a fee for its services; it is better to familiarize yourself with its structure and fees at the selection stage.

Modern cashless payment technologies allow people to make transactions from anywhere in the world. Thus, the use of merchant accounts allows you to expand the geography of your business.

Requirements for merchants from payment systems

When opening a merchant account, there are several requirements. First of all, we are talking about your legal status. An individual cannot open such an account. Only an entrepreneur or a legal entity can have a merchant account. Also, merchant payment systems impose requirements on the eCommerce platform – a website or a mobile application. The main ones are the following:

  • Correct display of all site pages, no errors.
  • Full compliance of the goods in the catalog with the declared characteristics.
  • The client who opens a merchant account conducts business in the area specified in the registration form and within approved URLs only.
  • Information on goods delivery and return is available on the platform.
  • The presence of contacts of the online store with up-to-date information on the website or in the application.

Before opening a merchant account for business, payment systems check the client, and if they have any claims, registration may be denied. It is necessary to eliminate the identified deficiencies and resubmit the application in such cases.

How to open a merchant account?

In the first stage, the client needs to prepare an application and a list of documents. The latter may differ depending on the type of your business and the choice of the payment service provider (PSP). However, there is a general list of relevant documents for all companies, without exception. The requested information includes:

  • Registration certificate.
  • A document confirming that the applicant is an official in the company.
  • Proof of business location – lease agreement, bank statement, etc.
  • Local documents that list the directors and owners of the business.
  • Copies of identification cards of all directors and owners of the business.

There are two ways to open a merchant account. The choice depends on how long you are willing to wait. The methods are as follows:

  • Directly through the bank. However, in order to open a merchant banking account in this way, you will still need a separate payment solution.
  • Complex solutions for online merchant transactions. Independent payment service providers provide them. These vendors provide a merchant account on behalf of their preferred banking partner.

It is also necessary to consider the size of commissions from different service providers.It is also necessary to consider the size of commissions from different service providers.


A merchant account is required for every online store to accept online payments. There are two ways to open it – through a bank or an independent payment service provider. The first method will require more time to wait since not all banks are ready to cooperate with small businesses. In the case of payment service providers such as PayPal or Square, approval of applications is faster – in 2-3 business days. These services specialize in working with small and medium-sized businesses, so all processes take less time here. In any case, the client must comply with the requirements of payment systems so that the merchant account can be opened quickly and without problems.

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