How the Merchant Account Process Works
A merchant account is what lets a business take cards. Here is what it is, what an underwriter checks, and how the setup steps run.
A customer hands you a card. Money leaves her bank and, after a few steps, lands in yours. In between sits an account most shoppers have never heard of. The merchant account process is how that account comes to exist, and this page walks through it in order.
A merchant account, defined briefly
Authorize.net's pricing page says a merchant account is a type of bank account that lets businesses accept payments by debit or credit cards. The same page says you must have a merchant account in order to accept credit cards. Authorize.net's page also says it works like a credit line for a business. It accepts payments and issues refunds.
What an underwriter looks at when you apply
Authorize.net's pricing page says an underwriter looks at your industry, processing history, personal credit, and business creditworthiness when you apply for a merchant account.
Processing history shows whether you have taken cards before and how that went.
The application and approval steps, start to finish
First, you gather your business basics. That means what you sell, your processing history, and your personal and business credit, the items Authorize.net's pricing page says an underwriter looks at.
Second, you submit the application. Authorize.net's page says you can contact them online with a quick form. A representative will also help you get started by phone. Its page also says partners will work with you to ensure you have everything you need to sign up.
Third, the underwriter reviews what you sent. This is where industry, history, and credit get weighed.
Fourth, approval arrives and the account is opened. Authorize.net's page says a completed Payment Gateway account application is approved automatically, while the merchant account goes to an underwriter. A merchant account from its All-in-one plan may have separate terms. You can review those at signup. Look through those terms before you sign anything.
Fifth, you connect the account to the tools that actually take payments. That next step is its own topic.
How the merchant account connects to a payment gateway
The merchant account holds the money. Something else has to move the card details from your customer to the networks. Authorize.net's pricing page says a payment gateway securely transmits payment data between a customer, your website or terminal, and the payment networks. On Authorize.net's model, the account and the gateway are two different things that work together.
You may already have an account, though. Authorize.net's page says if you have an existing merchant account, you can update your gateway with parameters from your merchant provider. Its page says its Gateway Only plan connects Authorize.net to an existing merchant account without replacing it. The same page says the gateway only option connects to any merchant account provider. In other words, your current account can stay in place while a gateway goes on top.
If you have neither, Authorize.net's pricing page says its All-in-one plan includes both a payment gateway and a merchant account. Its page says this solution also includes help getting you a merchant account. One caveat from the same company: an account you do not fully own cannot be used with the Authorize.net gateway.
Once the pieces are linked, the setup is light. Authorize.net's page says one integration connects a website, shopping cart, or invoicing system in minutes. Its pricing page also mentions a quick start guide with a step-by-step walkthrough and a first look at the platform.
What you can accept once the account is live
Approval and connection done, the range of payments opens up. Authorize.net's page says its gateway accepts credit cards, debit cards, and eChecks. It takes Visa, Mastercard, American Express, Discover, JCB, and Diners Club credit and debit cards. It also accepts Apple Pay, Google Pay, PayPal, and eChecks, which are ACH bank transfers. One limit from the same page: eCheck is only available for businesses based in the U.S.
Hardware is optional. Authorize.net's pricing page says its payment gateway accepts payments through a Virtual Terminal or digital wallet with no point-of-sale hardware required. Its Virtual Terminal accepts manual phone orders. Its mobile point of sale takes payments from customers using mobile devices. Its virtual point of sale links a card reader to a computer for in-person sales.
Two security points from the company are worth knowing. Authorize.net is a PCI DSS Level 1 Service Provider. It calls this the highest certification level in the payment industry. It also says card data never touches your own servers, which lowers your PCI compliance load. Its page also says the payment gateway has no contract or early termination fees. A merchant account may still have its own terms.
Where to go deeper on fees and getting paid
This page covers how the account comes to be. Two questions it leaves open are what each sale costs you and when the money lands.
For the cut each processor takes from a card tapped at your counter, read what a forty dollar sale costs. It works a real ticket through several published price lists.
For the price of getting your money in minutes instead of on the free schedule, read paying for instant payouts. Authorize.net's page notes that a merchant's exact deposit timeline may vary. It depends on who the Merchant Service Provider is. So timing is worth its own look.
Before you sign up, check the provider's own page for the terms in force that day. Published prices and plans change.