Wondering what you need to get a merchant account approved? While it varies from financial company to financial company, you will hit the points we cover here on most of your applications.
Complete Their Merchant Account Form
First, you will need to complete their form. It will be a rather long one asking about you as an individual as well as your business.
As an individual, you are the owner, operator, and director of the company. You are responsible for the direction of the company and upholding the integrity. Do you have any prior legal issues? They may do a background check or even look for references.
As a company, how long has your company been in business? What types of products do you sell? What is your industry. There are certain industries many merchant accounts will not accept, so it is best to ask them before you go through this application. These kinds of industries include online casino, dating, and porn websites. But more “normal” websites are those that are online, ecommerce companies. Some merchant processors don’t want to deal with online based businesses because they are a bit higher risk.
Why would they say an online business is higher risk? “Back in the day” these merchant account vendors would send a staff member to do a site visit. They want to see the operation, make sure it is a legitimate and established business. This makes them feel more secure there is some investment in the operations. They will get a lower rate because of this. So make sure your merchant vendor is open to having online businesses.
Your Personal Information
So once the application form is filled out, you’ll need to send more information about you. This is normally done with simply your identification. If you’re from outside of the country you’re applying, you may not have a local ID card such as a driver’s license. So then you’ll need a scanned copy of your passport.
Some merchant accounts may want a second form of identification as well. Varies from bank to bank.
Next they will ask for bank statements. Why do they need these? My assumption is that they want to see the activity in your account, as well as how much cash you have in the bank.
If you’re a new business with a low balance and very little transactions, this is a flag for the back office at the bank. I’d recommend having some decent activity and a fair amount of money in the bank before applying.
How They Will Fund Your Account
Now for some more fun parts! They will need to send money to your account once you get a customer sale. Where will they send these funds, as a batch deposit. What’s a batch? This is where once the daily sales are closed, the merchant bank takes the total of sales and refunds and processes one total payment to you.
So they will ask for a voided check, or if you don’t have that, a pdf of your wire instructions. This will be your bank account number, your swift address, bank name, branch location, and bank address. The more complete your wire instructions are, the less likely there is to be a question.
Residential Proof of Address, Business and Personal
Here is where it is a bit hard for the globetrotter! The bank will ask for proof of your address. Yes, both where your business is as well as where you as an individual.
Just like the commercial bank you applied at, they will want this to be from an established institution, normally:
Where in the world should your address be? It is ideal to be in the same territory as your company is registered to make it smooth and simple.
Or have a relevant reason why you’re living in a different country than your company. For Hong Kong, I have had friends who have gotten approved for their merchant accounts with personal addresses in Mainland China and Europe. But the policies are always changing, and unfortunately lately I have had listeners tell me they didn’t get approved with a Taiwan address.
So ideally if you can get residential and business proof of address in the same country as your company and merchant account, you’ll have the best chances of getting approved.
What Currency Do You Want To Charge Customers In? Get Paid In?
So here is where the wonderful and complex world of international business comes into play. You need to decide what currencies you will be operating in.
This would also depend on who your target customer is. Are you targeting Hong Kong local customers, then you would need HKD merchant account. Targeting the international market? Then they will be confused to see HKD pricing on your products page, and you should get a USD denominated account.
If you’re selling local in Hong Kong via e-commerce, you should check out our podcast with Damian Bos talking about HK e-commerce strategies.
Want to do more than 1 currency? Most merchant accounts will be able to do this, but you will need to apply separately. They can use the same application form and documentation, but you need to specifically ask for those additional currencies.
And another important note, you need to specify how you want your batch deposits to be paid. Certain merchant accounts can do different currencies. There may be fees involved, so be careful. This is where banks make tons of money, on the foreign exchange rate. Most of the time, for Hong Kong merchant accounts, you will be paid out in HKD, as that is the official currency. There are cases you can be paid in USD, but you need to be clear if there are fixed fees for this special situation.
For an example, you can listen to David Hehenberger share about his experience applying for Braintree in Hong Kong.
How Has Your Merchant Account Application Been?
So I hope today’s post helps you with preparing for your application. How has it been going? Apply already? Get approved? Or…rejected?
Please share with us in the comments below your story. Let’s all learn from each other and try to help everyone be able to accept credit cards for their global businesses.