Merchant accounts offer businesses a range of advantages. They enable businesses to accept credit and
debit card payments, accommodating customers who prefer cashless transactions. This convenience can lead
to increased sales as customers are more likely to make larger and more frequent purchases. By
facilitating credit card payments, businesses also project professionalism and credibility, crucial for
building customer trust.
With a merchant account, online and remote sales become feasible, expanding a business’s reach, and
enabling global transactions in various currencies. Additionally, merchant accounts streamline
transactions, reduce security risks associated with cash handling, provide transaction records for
financial management, and integrate with modern point-of-sale systems. They also offer secure payment
gateways and flexibility in payment options, all contributing to an enhanced customer experience and
business growth.
A merchant account is a specialized type of bank account that enables businesses to accept credit and
debit card payments from customers. It serves as an intermediary between the business, the customer’s
issuing bank (which provides the credit or debit card), and the payment processor. When a customer makes
a card payment, the funds are first deposited into the merchant account before being transferred to the
business’s regular bank account.
Merchant accounts are essential for businesses that wish to offer card payment options, whether in
physical stores, online, or through other means like phone orders. They provide the necessary
infrastructure to process these transactions securely and efficiently. Merchant accounts are typically
provided by financial institutions or specialized payment service providers.
Businesses that want to set up a merchant account usually need to go through an application process,
which may involve credit checks and assessment of the business’s financial stability. Once approved, the
business receives the tools and information needed to integrate card payment processing into their
operations, including access to payment gateways for online transactions.
While merchant accounts offer numerous benefits, they also come with associated costs, including
transaction fees and sometimes monthly service charges. These fees can vary based on factors such as the
volume of transactions, the types of cards accepted, and the level of security features provided.
The primary difference between a merchant account and an aggregator account lies in how they handle payment processing for businesses:
A merchant account is a dedicated account for larger businesses that want to accept credit cards. They are typically best for businesses processing over $200k per year.
An aggregator account (or payment service provider – PSP) is a shared merchant account typically used by smaller businesses processing less than $200k per year.
The key distinction is that a business individually owns a merchant account and provides more control, customization, and potentially lower fees for businesses with higher processing volumes. An aggregator account is shared among multiple businesses. It is managed by an aggregator or PSP, offering convenience and ease of setup, making it suitable for smaller businesses or those seeking a straightforward solution for accepting payments. Companies should consider their specific needs, transaction volumes, and preferences when choosing between these options.
The time it takes to get a merchant account can vary depending on several factors, including the provider you choose, your business type, your credit history, the completeness of your application, and the complexity of your payment processing needs. Overall, it generally takes 2 to 7 business days to get a merchant account. Here’s a general overview of the timeline involved in obtaining a merchant account:
Overall, the process of obtaining a merchant account can take anywhere from a couple days to a few weeks if its a very complex business. It’s important to choose a reliable merchant account provider, like Clearly Payments, and ensure that your application is complete and accurate to expedite the approval process. If you’re in a hurry to start processing payments, consider discussing your timeline expectations with potential providers to get a better idea of their typical processing times.
A few well-known and reputable merchant account providers in Canada that you might consider researching:
When looking for the best merchant account provider for your business in Canada, consider factors such as transaction fees, contract terms, available features (e.g., online payments, mobile payments), customer support, ease of integration, and compatibility with your business’s needs. It’s a good idea to compare multiple providers, read reviews, and even reach out to their customer support to get a sense of their offerings and responsiveness. Keep in mind that the “best” provider for your business might depend on your specific requirements and preferences.
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