Merchant Service Account: Why Your Small Business Needs One

An important part of running a small business is accepting payments from customers. And having or not having a merchant services account could make or break your company. Merchant accounts allow you to receive debit and credit payments through an agreement with a retailer bank and transaction processor.

The importance of having a good understanding of what makes up this type of financial construct cannot be overstated! It could mean the difference between success and failure for many small businesses in today’s economic climate!

In this blog, our San Diego merchant services experts at Rigel Payments discuss:

  • What merchant service accounts are
  • How they work and how to get one
  • Why having a merchant account is essential for your small business

And much more!

Merchant Services Account

Table of Contents:

  1. What is A Merchant Services Account?
  2. 7 Steps to Obtaining A Merchant Account
  3. Possible Merchant Account Fees
  4. Conclusion

People Also Ask:

Do I need a merchant services account?

If you’re a small business owner wanting to accept debit and credit cards in San Diego, having a merchant services account is a must. The bottom line is you cannot accept customer credit card payments without securing a merchant account.

In today’s fast-paced, electronic world, most customers expect to pay with a card without issue, and many don’t carry cash at all.

How do I open a merchant account?

Opening a merchant account is a multiple-step process. To do so:

  1. Start by choosing the right credit card brands to work with
  2. Decide on a payment model
  3. Evaluate your turnover
  4. Look into local banks
  5. Prepare your company website to take online payments
  6. Gather all necessary information and documents
  7. Submit a merchant account application

What is a merchant account vs. a bank account?

A business bank account handles expenses related to establishing and running your small business. This can include everything from utilities to rent.

A merchant account is a bank account that’s set up with a merchant services provider to handle your credit and debit card processing.

What is A Merchant Services Account?

A merchant service account is a bank account that allows your small business to accept credit and debit card payments.

These types of accounts are an agreement between:

For the settlement of debit and credit card transactions.

Every time a customer pays for your products or services with a card, the funds first go to the merchant account. From there, the payment transfers to your business bank account.

These transfers are usually done on a daily or weekly basis.

7 Steps to Obtaining A Merchant Account

Applying for and getting a merchant account is not an easy process, even though the business of issuing them is highly competitive. To reduce risk, most vendors use and will ask for certain criteria to decide whether to approve your merchant account application.

Seven things you can do to increase your chances for a successful application include:

  1. List your small business type
  2. Mention if your business has a higher or lower risk of returns or credit card fraud
  3. Put down how long you’ve been in business
  4. Include your company history (any bankruptcies, defaults, etc.)
  5. Mention if you’ve had a merchant service account before
  6. List your personal credit card history
  7. Put down your credit card history as the business owner

If you’re a new business owner, you may want to apply at the same bank that handles all your bank accounts.

If you’re considered a high-risk business, don’t fret! This doesn’t mean application rejection. However, it may mean higher transaction fees by the vendor to cover the risk.

The good news is, if your company becomes well-established, the fees can always be renegotiated in the future!

Possible Merchant Account Fees

Merchant services accounts often come with various fees. Unfortunately, not all contracts state these easily.

For this reason and many others, it’s important to know the different types of charges and how to look out for each.

Common merchant account fees include:

  • Application Fees
  • Setup Charges
  • Monthly Fees
  • Per-Transaction Charges
  • Discount Rates
  • Cross-Border Fees
  • Rental charges for credit card terminals

Another important factor to consider is that additional charges can increase your total fees per card transaction.

To ensure your getting the best deal, we suggest shopping around and comparing when looking to apply for a merchant account!


Small businesses have a lot to gain by accepting credit and debit card transactions. Not only does it make paying for your products that much easier for customers, but you also reap the benefits of increased sales.

Are you ready to increase revenue by accepting credit and debit cards with ease?

If so, our merchant services providers at Rigel Payments are here to help! Contact our friendly and knowledgeable experts to learn more today!