If you need to accept credit card payments from customers online, your best option is to set up an ecommerce merchant account. It’s the only viable solution for serious businesses looking to establish credibility and achieve the best rates for online payments.
Before you get started, though, it’s important to know what an ecommerce merchant account actually is, how to select one, and how to get set up.
What Is an Ecommerce Merchant Account?
An ecommerce merchant account is the specialised bank account that enables you to accept and manage credit card transactions from online customers. If a customer makes a purchase on your website, the payment is transmitted from their bank account, through a secured payment gateway, and into your merchant account.
All approved funds are stored in your merchant account until you transfer them to your primary business bank account—a process that can take 1 to 2 days on average. Your merchant account is secured by a unique merchant ID that identifies you as the rightful recipient of the funds. For businesses that have several payment streams or terminals, multiple merchant IDs may be managed under the same merchant account.
A merchant account is typically provided to online sellers as part of a larger merchant services package, which (depending on the provider) may include:
- An integrated payment gateway
- A virtual terminal (for manual payment processing)
- A physical point-of-sale system and/or card readers (for brick-and-mortar businesses)
- Fraud and chargeback mitigation tools
- A merchant dashboard for monitoring and analysing your credit and debit card transactions
- Ongoing customer support
Unicorn Group offers all of these services and more.
What You’ll Need to Set Up an Ecommerce Merchant Account
Before you can establish your merchant account, you’re going to need the following:
- An ecommerce website. For this, you’ll need web hosting, your own website domain, and typically a shopping cart platform like Shopify, WooCommerce, or Zen Cart. Your merchant provider will need to equip you with a custom API or other coded integration to insert into your source code, so you’ll generally want to ensure that your store is fully designed and ready to receive customers before you establish your merchant account.
- An SSL certificate. Make sure that you purchase a Secure Socket Layers (SSL) certificate for your website if you haven’t already. It’s required for PCI compliance, and it’s absolutely critical if your website is transmitting sensitive credit card information. SSL encrypts data to prevent interception from third parties.
- A payment gateway. The payment gateway connects your merchant account to your customers’ banks. Some merchant providers offer their payment gateway as an add-on or standard integration, but some merchant accounts will require you to secure your own payment gateway to facilitate transactions.
When applying with a merchant services provider, you may also be asked to provide documentation pertaining to your business and financial records.
How to Choose an Ecommerce Merchant Account
Choosing the right merchant account provider is all about knowing your needs. Some providers are geared toward omni-channel businesses that work both on and offline; others are online only. Some are best reserved for high-transaction-volume businesses while others are happy to work with new and growing organisations.
The following qualities are essential, though, regardless of the nuances of your business:
- Affordable, straightforward pricing. While your rate options will vary depending on your type of business, years in business, transaction volume, reputation, and other factors, you want to look for a provider that offers fair pricing with only a subscription and transaction fee. Read the fine print, and watch out for hidden fees like statement fees, batch fees, minimum transaction fees, and costly setup and cancellation fees. Some merchants offer flat rate pricing while others impose tiered or markup pricing, so be sure to calculate your true cost when weighing the options.
- PCI compliance. PCI compliance is a requirement for any online business that handles sensitive credit card data. So if a merchant provider doesn’t emphasise their own PCI compliance, this is a major red flag.
- The availability of a bundled payment gateway. If you have to purchase your merchant services and payment gateway from two different companies, you’re usually going to end up paying more. You’re also going to be in a more difficult position when you require customer service, because it’s not always easy to tell which company is equipped to help you. By bundling, you’re able to streamline the entire process and ensure fewer headaches.
- Varied payment options. You ideally want a merchant provider that can handle all of the major credit cards and debit cards (like Visa, Mastercard, and American Express) as well as alternative payment methods. Make sure that foreign transactions aren’t a problem; you want a company that accepts the currencies and payment types that are present wherever your customers are.
- Fraud prevention tools. This is an important one. Chargebacks are on the rise, as are more nefarious forms of fraud. Good payment service providers will have security mechanisms in place to detect potentially suspicious transactions and often prevent them before they happen.
- MOTO services. If you ever have to input transactions manually, Mail Order / Telephone Order (MOTO) services can be invaluable. You’ll also want to opt for a company that offers a virtual terminal.
- Reliable customer service. When issues arise (and they will arise), you need to know that help is just a phone call away.
Unicorn Group is renowned in the merchant services industry, as it enables you to accept electronic payments from 196 countries, prevent fraud and chargebacks, and easily bundle your merchant account with an industry-leading payment gateway. Unicorn also offers PCI compliance and SHA-256 SSL encryption coupled with unparalleled customer service. You won’t find a more reliable and versatile payment processor.
How to Set Up an Ecommerce Merchant Account
If you have found a merchant provider that you’re happy with, it’s relatively easy to get set up and start accepting payments.
- Sign up. Your acceptance is subject to approval and may depend on your credit rating, industry (high-risk merchants generally pay more), business size, and other factors. You should be notified of your approval status within a few days. Once your approval is confirmed, you can proceed to the next step.
- Log in to your merchant account and enter your personal information: business identification, business bank information, website information and preferences, contact information, and anything else required. You may also need to link up your payment gateway if you’re using a separate service for that.
- Connect your merchant account and payment gateway to your website. Most often, your merchant provider will send you instructions along with a custom API code. You may need to create an API key, or one may be established for you. Then it’s usually as simple as adding a piece of source code to your website. This may be done manually, or your merchant provider may have a plug-in that works with your shopping cart platform. If that’s the case, you would just install the plug-in and enter your API key or code within the plug-in’s settings menu.
The initial setup can be a little complicated, but your merchant services provider will usually have customer support experts to help you through the integration. When signing up, just be sure to find out if there’s a charge for this service. At Unicorn Group, we provide the initial setup assistance for free.
Once the integration is completed, it may take a few hours or up to a full day before your site will be able to accept credit card payments. Be sure to test the success of the integration. If you’re still not able to process transactions smoothly within one business day, contact your merchant provider’s customer support.
Getting the Most From Your E-Commerce Credit Card Processing
Once your merchant account is up and running, you can enjoy all the benefits including the ability to process payments and track your online sales trends.
Keep a close eye on your analytics data to assess the overall health of your ecommerce business, and be diligent about addressing suspicious transactions right away. And anytime you receive a chargeback due to friendly fraud, it’s very important that you file a dispute. A high chargeback ratio can place your merchant account in jeopardy, so always be proactive.
A merchant account is one of the most essential ecommerce tools for any online business owner. So choose your payment partner carefully, and be sure to make the most of it.