Myth #1: Merchant accounts are difficult to get.
When e-commerce was a new concept in the early 2000’s it was difficult to get a merchant account if going through a traditional brick and mortar bank. Fortunately, some merchant account providers (such as Merchant Accounts.ca) were established to make establishing a merchant account easier for online businesses.
The reality is that it is much easier to get a merchant account today than it ever has been. In fact, the requirements in order to establish a credit card processing merchant account are quite easy to satisfy. Although some businesses choose to incorporate, many of our customers register their business as a sole proprietorship. Then they open a low cost business bank account at their local bank to receive deposits. In most provinces you can register a business name for under $100. That is all that is needed in order to open a merchant account.
Myth #2: Getting a merchant account involves a difficult application process.
The actual process of applying for a merchant account can be easy or difficult depending on the criteria of your business and the provider you choose to be your merchant account provider.
We try to make the application as easy as possible for our clients by breaking it up into two parts. First you fill in the online application form on our website with basic information about your business. Then we use that information to pre-fill the offline application documents for you and send them to you by email. You just need to print, sign and then email them back to us with a copy of your business registration document and a void cheque so that we can make deposits into your bank account. Some companies like Paypal defer the application until after a business has started processing payments. This can be a bonus in some situations, but detrimental in others. (Learn more about the differences between an aggregator like Paypal and a traditional merchant account provider like Merchant Accounts.ca here.) The reality is that getting an account is not difficult, and shouldn’t involve much more than filling out the application form with your business information and sending in a copy of the business registration and void cheque.
Myth #3: It is expensive to setup and maintain a merchant account.
This is another myth buried in a long distant past when e-commerce was a brand new concept. While that may have been true 12 or 13 years ago, when sponsor banks didn’t understand e-commerce, these days it is simply not the case. At Merchant Accounts.ca our Starter accounts are free to setup, and have no monthly fees at all. You only pay a low flat rate fee whenever you use the account to process a credit card transaction.
We also provide a merchant account option that does have a setup fee and a monthly fee. This account is meant for large businesses that do a lot of volume on credit cards and want the lowest discount rate possible. Even small businesses can accept payments online with a full merchant account. Whether your business is small or large, cost should not be an issue when it comes to being able to accept credit cards.
Myth #4: Startup businesses cannot be approved.
Startup businesses certainly can be approved. This is one area that very much depends on the sponsor bank and their approach and appetite when it comes to young businesses.
At Merchant Accounts.ca our bread and butter are small and mid-sized businesses. We like clients that we can get to know by name. Quite candidly, our success is built on the strength of our relationships with our clients. If you operate a new or young business, the best thing you can do is ask your chosen processor how often they work with startups. Ask for a few references. Almost every large business was a small business at one point in time. One of the best aspects of my jobs is working closely with business owners as they take the journey from startup to established businesses. It’s not always a simple journey, and if I’m honest not every client launches a third party payment successful business. However, we are there to help as much as possible in the payments department, and if you have a young business we can help you to get an account.
Myth #5:. Canadian businesses have to exchange their USD sales into CAD upon settlement and lose money in the currency exchange process.
As a Canadian business it’s often imperative to be able to accept payments in US currency. Some credit card processors may allow you to charge customers in USD, but require you to deposit these funds to your Canadian dollar bank account. This incurs significant FX fees.
The reality is that accepting payments in USD is easy, and as a business owner you should always settle funds directly back in USD to avoid any FX (currency conversion) fees. We can setup accounts to process in USD and deposit the funds directly into your US currency business bank account at a Canadian bank. (This is especially useful for business owners who must pay suppliers in USD since