Merchant Account
When you start to receive payments online, perhaps you started your own business, you may have to think about opening a merchant account, but the necessity of this depends on various factors like what kind of business you running and your banking setup. You may need to connect to a merchant account on Wellcoinpay. Don’t know what a merchant account actually is and whether you really need it for your existing of future business? Let’s take a closer look right now and maybe it will help you to decide.

Merchant account? What is it?

First of all, payment processing gateways are the thing that will enable you to receive payment from your customers online. The most popular payment methods among customers include PayPal, Authorize.Net, and Stripe. When the money arrives at your account it does not go straight to your bank account. With PayPal, you need to order transfer manually, and other gateways will do it automatically but according to a schedule (every to days, every week, or every month, for example).

When the client already send you money, they go to the merchant account first and only then to your bank account. Credit cards are called that because the banks agree to front payment on behalf of the customer to the merchant. But this involves risks to the bank and payment gateway owner, so they figured out a way to minimize these risks by adding this time delay into the cash flow.

Essentially, the merchant account is an escrow, it makes sure that there are as few recalling payments as possible. Keeping that in mind, it is understandable that the most important part of opening a merchant account it to get approved by the underwriting department of the merchant's account provider, who is performing a risk analysis of how likely that payment will cause problems for them. 

There is no trading account

Each payment gateway has a specific type of trading account associated with it, but some of them work behind the scenes. Many of them are actually "aggregated" trading accounts and don't need to be set up separately. Stripe and PayPal work exactly like that, for example. With aggregated accounts, your money is part of a bigger payment pool owned by multiple merchants.

If you want to transfer money from an aggregated trading account, the gateway payment platform will do it for you. An account like that are not controlled directly by you, and the provider can change rules of service anytime, so if you have one of them, constantly pay attention to the terms and conditions and any changes that might be made to them.

Cases when a special trading account is required

If the company wants to accept credit cards without the need of using a payment gateway with hidden trading services, must open special trading accounts. Gateways that offer the minimum delay time for money transfers, and Commission structures that are best suited for large transaction volumes, usually require you to open your own trading account - either with them or with an approved trading account provider.

Even if this is not required, you can open a special account to be able to get special Commission rates and create payment schedules that are the most comfortable to you. If you have a large sales volume, you can negotiate better rates with the institution that opens your trading account. If the cash flow is a big issue for your company or your career as a freelancer, then increasing the time when your accounts actually show up on your Bank account is crucial.

While applying for a special trading account, you and your company will have to go through a thorough credit card review and underwriting process. This process will take some time and will require faxing Bank accounts and other information. For many, especially people who are just starting to issue invoices online and don't necessarily use it as a payment mechanism, the complex approval process as a merchant is a sufficient deterrent - if it's you, then a combined invoice may be the best option.

Cases when a combined trading account is required

Many businesses can comfortably work without a special merchant account and still get payments online, they just don’t need it, because a small amount of saving that they will get is just not worth all time and energy that is necessary for getting an approval. All the rates they give are so complicated and confusing for some people that it is really hard to figure out how much they actually paying. And furthermore, you may pay more than you thought.

Plus, new businesses that just opened and have a short credit history or don’t have one at all, and businesses with bad credit history may not meet the requirements for opening a special trading account. When opening business outside the USA, requirements might be even harder to meet. But you can always start with an aggregated account and later switch to a dedicated account if your business is steadily growing and the volume of your sales justifies this change.

Online invoicing with the use of the aggregated trading account

The easiest way is to set up a payment gateway, such as Paypal, 2Checkout, or Stripe, with a merchant account that is automatically aggregated. These gateways have their own customer support and shopping carts. The process is so simple that you will be able to accept payments from the credit cards within ten or fewer minutes. They accept different credit card types and allow them to make payments in multiple currencies. PayPal, for example, also allows users to pay with funds stored in their trading account.

Using payment gateway and an aggregated account will be even easier if you use Invoice Ninja. It has the support of many different payment gateways, so you can easily integrate the type of billing with payment collection. If you are stuck for some reason, support is here to help you deal with your problem. There are enough expenses for small businesses that they can't avoid, and it is recommended that you save time and money by choosing a simpler way and signing up with one of the free available payment gateways.