Qualifying for a merchant account

Although a merchant account is essential for your online business, qualifying for a good one can be difficult, especially if you have had credit problems in the past. Merchant accounts are indeed available to most people, but your fees will vary according to your particular circumstances.

Here are a few factors that can affect your ability to qualify for a merchant account as well as the fees you'll be asked to pay:

Your personal credit profile - This is perhaps the most important factor in your ability to qualify for a merchant account and the fees you'll pay if you get one. Many merchant account providers simply won't approve an account for people with poor credit. Others will give you an account, but you'll pay huge set-up and transaction fees.
How long you have been in business - The longer your business' track record, the easier it is to qualify for a merchant account and the lower your fees will be. Many merchant account providers require a minimum time in business before they'll even approve your application at all.

New businesses are considered to be a higher risk, so if you're approved you can expect to payer higher fees.
Type of business - If your business operates online exclusively, finding a merchant account can be more difficult than it would be if you also operated a physical storefront.
The type of products you sell - If you sell tangible products, you'll have an easier time finding a merchant account than you would if you sold intangible items such as ebooks, software, or services. Transactions for intangible items carry an increased risk of chargebacks.

Conclusion

Regardless of your circumstances, you'll probably be able to find a merchant account, but be prepared to pay higher fees if your circumstances warrant it.

<< Part 1 - Merchant accounts explained
<< Part 2 - Costs associated with a merchant account