What an Online Merchant Account Is
An online merchant account lets you take card payments on the web. Here is who stands behind it and what the acquirer checks before it says yes.
An online merchant account is the account that lets your website take card payments. It is not the same as the business bank account you already have. Here is what the account is, who stands behind it, and what the acquirer looks at before it opens one for you.
What an online merchant account actually is
Visa's standards say acquirers must have a Merchant Agreement with each merchant to take Visa payments. The acquirer is the bank side of the deal.
The merchant account is the pipe. The bank account is the bucket. You need both, and they do different jobs.
To take Visa cards, you need an agreement with an acquirer. Someone still has to approve you for it.
Who is on the other side of your account
Three parties sit behind every online merchant account. First, you, the merchant. Second, the acquirer that opens the account and takes you on. Third, the card networks, whose rules the acquirer must follow.
Visa's standards say acquirers must develop a risk-based underwriting process for onboarding new merchants. That process is the acquirer's job, not yours, but you have to pass it. Read why banks watch processor accounts to learn more.
Visa's standards also say acquirers must sign a Merchant Agreement with each merchant that takes Visa payments. So the account comes with a contract, and that contract is between you and the acquirer.
What underwriting checks before it opens your account
Underwriting is the review that decides whether the acquirer will take you on. Visa's standards say acquirers must establish a risk-based onboarding policy that segments merchants into risk categories. Your business lands in one of those groups.
The review covers several things at once. Visa's standards say underwriting must include verifying a seller's name, address, email, phone number, business registration and documents. Visa's standards say acquirers assess a merchant's creditworthiness by looking at credit history, financial statements, debts and public records. Visa's standards say acquirers review a merchant's business plan, goods or services, delivery methods and return policies.
Your history matters too. Visa's standards say a merchant's history of terminations, excessive chargebacks, fraud or illegal activity can affect the underwriting decision. And Visa's standards say acquirers must check the Terminated Merchant File before finalizing a contract with a prospective merchant.
Visa's standards say acquirers use Identity Verification Services to help verify merchant identities by cross-checking provided information against multiple data sources. Expect the acquirer to compare what you wrote against what it can find elsewhere.
The documents and details you will be asked for
Have these ready before you apply. Visa's standards say acquirers obtain a business license or registration certificate from the merchant. Visa's standards say acquirers collect your business registration number or tax ID number. Visa's standards say acquirers collect the name, address, government identification number, email address, and telephone number of each principal or director.
For the business itself, Visa's standards say acquirers must collect the merchant outlet address including street address, city, state or province, and postal code.
Visa's standards say acquirers screen merchants against all applicable economic and government trade sanction watch-lists in accordance with applicable laws and regulations. This is a routine check, not an accusation. Every applicant goes through it.
Extra checks that apply to online merchants
Selling online adds a layer on top of the basics. Visa's standards say acquirers collect extra details for e-commerce merchants. One is a list of the URLs you use. List every site where you take payment, not just the main one.
Visa's standards say acquirers verify that the merchant is the registered owner of its domains and websites. Make sure the registration records show your business name before you apply.
Visa's standards say acquirers must review merchant business activity including URLs, products or services sold, and delivery methods. Your website should match your application. If the site is still being built, say so and show what will be on it.
If you use a service provider to handle payments, Visa's standards say a merchant's service provider must be registered as a TPA with Visa and compliant with PCI DSS. Ask your provider for proof of both before you sign with it.
Why some applications come back conditional
Visa's standards say an application decision can be approval, decline or conditional approval with exposure mitigation strategies such as reserves or holds. A conditional approval means the acquirer will take you, but with limits attached.
The acquirer may see something in your file it wants to watch. The conditions are the acquirer managing its own risk. They are not a verdict on your business.
If you are declined, do not send the same application elsewhere.
What happens after approval
If you are approved, you sign a merchant agreement. Two other details get set too. Visa's standards say acquirers assign the MCC that most accurately describes a merchant outlet's business. That code tells the network what you sell, so it has to be right. Visa's standards say acquirers assign a unique Card Acceptor Identification number to each merchant or TPA.
If you change what you sell or add a new site, tell the acquirer.
How to prepare so your application goes smoothly
Get the basics straight first. Use the same business name, address and registration details on every document. Register your domains in the business name. Build the website before you apply, or have a working draft ready to show.
Write a short business plan that says what you sell, how you deliver it, and what your return policy is. Visa's standards ask acquirers to review exactly those things. Put them in writing where the acquirer can find them.
List every principal or director. Give the details the acquirer will ask for. Be open about any past termination.
Do you sell by phone as well as online? Read up on billing authorization on phone sales.
Answer every question. Attach every document. Make your website match your answers. The acquirer wants proof that you are who you say you are. It also wants proof that your business is what you say it is. Make both easy to see.