How to Create a Merchant Account : A Step-by-Step Guide


How to create a merchant account

How to create a merchant account

Creating a merchant account is in the merchant’s best interest. Even in the brick-and-mortar retailing, customers do not always have cash on them. So, the owners of such businesses have to open merchant accounts to be able to process and receive credit card payments.

And it is even more critical for online businesses that want to process credit card payments.

Getting such an account is a long procedure. But don’t you worry: in this article, we will walk you through it step by step.

But first things first. Let’s define what a merchant account really is.

What is a merchant account?

A merchant account is an agreement between a merchant and an acquiring bank. This agreement allows the former to process and accept credit card payments. By signing this agreement, a merchant agrees to abide by the operating regulations established by Visa, MasterCard, or any other brand.

You might also like “How to accept credit card payments without a merchant account

Acquiring a merchant account is a way for a merchant to grow his business by reaching out to a greater number of customers willing to pay for his goods and services with a credit card, not cash.

Now the only question left is how to open this account and where.

How to create a merchant account

First and foremost, there are many things one has to take into account before making a final decision about a merchant account provider.

And while the best rates and the most attractive conditions totally depend on the type of your business, its size, turnover, processing history, and many more other details, we would like to point out the most critical things you simply cannot afford missing.

1. Choose credit card brands to work with.

This is the starting point of your journey. Begin with analyzing what credit card brands are important to you. This answer depends on the demographics of your target audience.

You might only need Visa and MasterCard. But if your clients come from countries with their own unique credit card brands, then make sure that the bank you want to open an account with offers you such an opportunity.

To give you an idea of how that works, here is what the trusted sources report about the popularity of different credit card brands in different parts of the world.

Credit card brand leaders by country

Credit card brand leaders by country

So far, Visa remains a #1 choice in more than 120 countries. It leaves MasterCard and American Express far behind.  

2. Figure out the payment model.

As a merchant, you might offer your clients various payment models, be it recurring billing or one-time payments. See whether the bank supports both of these payment models for your type of business. And if so, find out what rates the bank offers and choose the one with the most acceptable rates for you.

3. Analyze your turnover.

The rates banks establish depend on the turnover of the business. So, be ready to provide the financial institution with all the essential documents that display your financial state and card turnover within the last year or so.

4. Start looking for a (local) bank.

We often recommend our clients to open a merchant account with a local bank meaning the bank that is under the same jurisdiction the merchant’s business is registered. The thing is that they offer the best rates and traffic performance. Therefore, before you study your international options, look for a local bank to collaborate with.

Besides, you should always aim for getting a merchant account at a bank you have your real account opened at. In this case, the fact that a merchant stores a certain amount of money on his account significantly increases bank’s trust and ensures better conditions.

Also read: “14 common misconceptions about payment gateways

However, for those owning an international business, finding a local bank in each and every country they work with is not an option. It will simply take ages given the duration of the opening, setting up and integration processes.  

That is why they can use the assistance of Payment Service Providers which often got it all covered.

And while still on the subject, startups, high-risk merchants and businesses that have been in the business for less than two years (or those with no processing history) should also use the services of an experienced Payment Service Provider. This increases a merchant’s chances of getting a merchant account and eliminates dozens of business risks associated with payment processing. And it saves merchant’s nerves and efforts.

mobile payments

5. Prepare your website.

To get a merchant account, you need to prepare your website (as long as you run an online business). Comb through it to ensure that it complies with all the Visa and MasterCard requirements.

If you use the services of a Payment Service Provider, they can help you at this stage. If not, then it is your responsibility to ensure that the checkout is secure and product and delivery options descriptions are clear.

Another important thing to take into account is the domain information of your website. To get a merchant account, one must have a website with a unique domain and website’s own hosting.

6. Gather all the documents.

The next step would be gathering all the documents and submitting them to the bank. The documents include a detailed list of all the business activities you are going to conduct, a voided check for the checking account, and tax returns. The list might vary from bank to bank with new documents added to the list. More about all the required documents here.

7. Submit an application form.

Finally, fill out an application form for the account in question. Once you submit the form along with all the previously gathered documents, the bank will look into your application form and make a final decision.

Finally, the merchant will need to pay a setup fee for the account. This is not the only fee the merchant account provider will charge. Among others are the monthly and decline fee, as well as chargeback and refund fees. Be sure to read a section in the contract where they are mentioned carefully not to be caught by surprise later.

As soon as the bank sets up your account, you can start processing and accepting credit card payments.

How a credit card merchant account works

  1. A customer decides to make a purchase on your site and enters his payment credentials.
  2. A payment system integrated into your site transfers the payment request to the merchant’s acquiring bank.
  3. The acquiring bank sends the payment request to the client’s issuing bank.
  4. The issuing bank processes and validates the request and immediately sends the answer back.
  5. In case the issuing bank gives green light to the transaction, both the merchant and the customer receive a notification about a successful transaction, and money will be transferred to a credit card merchant account.
  6. If the issuing bank doesn’t approve the transaction, the parties will receive a notification about a failed request.

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  1. Guest


    Very interesting to read you
    Good luck to you

  2. Guest

    Shoaib ahmed

    I want to open an merchant account

  3. Guest

    Abdul basheer

    I want inata merchant pay

  4. Guest


    How I can make a merchant account for my business?
    I feel it’s too difficult for me. Can you help me out in this?

  5. Guest

    Harry Perry

    Greetings Yuliia, please I will definitely need to open my own Instant merchant account. Please do direct me to do you cos majority of my clients have been requesting for my own Instant merchant account. Thanks alot.

  6. Guest

    Subhasis Nanda

    Yuliia Mamonova
    How r u ?
    please send me step by step procedures for opening up insta merchant account as well as please send me one address of merchant who hold the insta merchant account so that I will be able to communicate with him details pros and cons after opening of the account.

  7. Guest

    sameer shaikh

    I want to open merchant account

  8. Guest

    Pradeep Bh6

    I a chemist and I also applied for Marchant key for our business at pnb bank cam you help us

  9. Guest


    Like!! Great article post.Really thank you! Really Cool.

    • Thank you! Great to hear that! We’ll post more expert advice – make sure to subscribe!

  10. Guest


    How can I start my own merchant company? Please advise. Similar to stripes

    • Hey, Tee! Thanks for reaching out. If you want to start your own merchant company, you should try a white label payment gateway. That is the software that processes payments online. You can either develop it yourself (usually takes years) or buy a ready-to-use solution from professionals. It saves both time and effort. You can contact to our sales managers ([email protected]) they will give you all information about it

  11. Guest

    Tee Ibrahim

    How may I start my own merchant company? Similar to stripes?

  12. Guest

    Michael Gbadamosi

    Hello I want to merchant account so my clients can buy goods online also I am a nigeria can a foreigners get access your gateway payment

  13. Guest


    Good morning
    Could you send me instructions how to open merchant account please

  14. Guest


    I want to open an account

  15. Guest

    olamilekan ishola kazeem

    how to create a merchant code?

  16. Guest


    Why merchant account accept in Pakistan

    • Hello Azamhussain! I’m not sure I understood your question. Could you please specify?

  17. Guest


    I want merchant account plz tell me online procedure

  18. Guest

    Okumu Joseph

    I would wish to open a Merchant Account how do I do it

  19. Guest


    How do i find or serach ISO agents online for merchant account.

  20. Guest

    Udipta Das

    Does PSP companies also come with merchant account facilities, not needing for the merchant to open a separate account to accept card payments

  21. Guest


    I want to open merchant account

    • Thank you for your interest Omoloye! We sent you all the details via email!

      • Guest

        Angelina Hansen

        Good morning
        Could you send me instructions how to open merchant account please…

          • Guest


            Is there any need of agents to complete merchant by do doing self

  22. Guest

    Adeosho Titilayo

    Love it, but how toopen account with u an website

    • Dear Adeosho Titilayo! Thanks for your interest: we will send you an email with instructions. Have a great day!

  23. Guest

    junjie calicoy

    Thanks for the guide.This is our topic now……thankssss

  24. Guest


    at last i have understood this topic. thanks

    • We’re happy to hear that! Subscribe to our blog to get more useful information every week!

  25. Guest


    I want merchant account

  26. Guest

    Sarah Luis Marco

    The article is informative and detailed. I used these tips and finally created my first merchant account.

    P.S. It is great that you explain the fintech topics in user-friendly language.


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