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How to Open a Merchant Account: 7 Steps to Start Accepting Credit Card Payments

By |Published On: March 12th, 2022|

If you’re looking to start accepting credit card payments from your customers, then you’ll need to open a merchant account. While the process of setting up a merchant account may feel overwhelming at first, it’s essential to a great business. Here are seven steps on how to get a merchant account.

How to open a merchant account

  1. Get a business license
  2. Open a business bank account
  3. Evaluate your needs
  4. Compare providers
  5. Complete an application
  6. Submit to underwriting
  7. Get approved and start processing

Get a business license

To open a merchant account, you’ll have to prove your business is legitimate. The very first step to setting up a merchant account is to get a valid business license.

Open a business bank account

Once you have a business license, you’ll need a business bank account. This bank account is where your merchant account provider will deposit your credit card sales and withdraw any fees. Most businesses prefer to open a business bank account with a local bank, as local banks tend to provide a level of convenience and customer service that can’t be matched by online accounts. To get started with a business bank account, you’ll need to provide your EIN (employer identification number) and your business license.

Evaluate your needs

Before you can open a merchant account, think about your business needs. For example, you’ll need to decide which credit cards you want to process. Will you accept American Express, or just Mastercard and Visa? What about ACH or eChecks?

Next, you’ll need to consider how you want to accept credit card payments. Do you simply need an in-person solution for processing payments in your brick-and-mortar store? Or do you need a solution that supports mobile payments and online payments? How will your customers pay you—will you provide a customer payment portal where customers can pay off invoices?

Map out exactly what your business will need, including both the short-term and the long-term. If you’re planning on expanding in the next few years and anticipate additional payment needs in the future, be sure to include them in your planning.

Compare providers

Now that you have an idea of what your business needs, you can take that information and start assessing merchant account providers for the best fit.

The video below will explain what to look for when finding a merchant services provider.

Here are a few more key features to look for when opening a merchant account:

PCI compliance and strong security

Merchants have a responsibility to protect their customers’ credit card information, and that responsibility can sometimes feel like a burden. But you can release some of that stress by choosing a PCI compliant merchant account provider that offers strong security features. Knowing your merchant account provider is actively protecting your customers’ vulnerable data will lift off some of the pressure and give you peace of mind.

Free in-house support

If something goes wrong with your credit card processing, it’s no joke—that’s your profit at stake. Look to open a merchant account with a provider that supports you with 24/7, in-house customer service free of charge.

Next-day funding

Some merchant account providers offer next-day funding options, so you get money in your account faster.

Transparent pricing models

Credit card processing fees are confusing, especially for merchants new to the scene. If your merchant account provider is unclear or anything less than completely transparent, it might be a sign to reconsider. Research credit card pricing models to see which model is right for your business, then choose a provider that offers your preferred method. Two of the most popular and cost-effective pricing models are flat rate and interchange plus.

The podcast episode below goes into each pricing model in detail:


Keep the future in mind when opening a merchant account. Your business may be small or based in brick-and-mortar now, but if you have plans to expand or venture online, you’ll need a merchant account provider that can scale with your growing processing volume and changing needs.

No contracts

Ensure your merchant account provider doesn’t require a contract or choose one that offers month-to-month contracts. The last thing you want is to get locked into a long contract with a provider that turns out to be a bad fit.

No unnecessary fees

Finally, research any fees that will be included in your merchant account service. Some fees are unnecessary and only hurt the merchant. Ask for a detailed list of all included fees, and look out for customer service fees, batch fees, annual fees, and monthly minimum fees.

A single provider for credit card processing

Some merchants choose a merchant account provider that’s separate from their credit card processor. However, splitting these services between two different providers is a missed opportunity. It’s more efficient, convenient, and cost-effective for merchants to choose a merchant account provider that also offers credit card processing.

If your credit card processor also opens your merchant account, you’ll experience several benefits:

  • You won’t have to open two separate accounts for credit card processing and ACH processing
  • Reduces the number of people you have to deal with and gives you a single point of contact for all your credit card processing
  • Underwriting typically happens in-house (and you only have to do it once)
  • Access to additional services like chargeback management, payment gateway, integrated payment applications, and eCommerce integrations

Complete an applicat