If you want to accept credit card payments on your website generally you will need to set up directly or indirectly a merchant account at an acquiring bank. PAYMILL works with several banks in order to provide the best fit for your needs and facilitates the opening process.

 The background

A merchant account is a type of bank account that allows businesses to accept credit and debit card payments. A merchant account is established between the merchant that would like to accept card payments and a merchant acquiring bank. Typically the bank is responsible for the acceptance, processing, and settlement of the transactions.

As regulated financial institutions the banks are required to request information from any new client. Part of this process includes the request of documents and information, which is called “Know Your Customer (KYC)”.

Know your customer (KYC) refers to due diligence activities that financial institutions and other regulated companies must perform to obtain relevant information from their clients for the purpose of doing business with them.

How does this impact me as a merchant?

When approaching a payment processor to start receiving online payments you will be requested some information about yourself and about your business. This information might be required upon registration and/or at a later stage during the account lifetime.

The information required includes business information, personal information for some of the individuals involved in the business as well as the documents to support the information provided.

What information is needed?

Although the requirements can vary significantly depending on the internal rules of the financial institution, the business industry, the country, type of goods/services sold and other factors, generic information is normally required:

  1. Business data

In general, the information that needs to be provided is:

– Company data, registration number, address, phone number, country of registration, etc.

Personal details for some members of the company, such as authorized signatory and shareholders, etc.

– Bank Account data, bank account number, bank name, swift/BIC code, etc.

– Website information, the URL must contain certain information in order to be compliant for payments processing (for your reference please see previous article on website compliance) Additional information might be requested in order to set up your merchant account and meet your needs. These questions might be related to the type of products your business needs (Credit/debit card and others), payment types (subscriptions, pre-authorizations, etc.), etc.…

The above information is normally required upon sign up while you complete the registration of the payment processor.

  1. Supporting Documents:

The application normally requires supporting documentation, the generic documents are:

– Proof of identity, such as passport, national ID cards, for certain members of the company/business

– Address information and/or documentation for these members

– Business registration documents for the legal entity

The requirements for these documents also might vary in format and XXXX.

  1. Contracts:

A signed contract is usually necessary in order to establish the business relationship between the merchant and the acquiring bank.  A copy of the signed contracts and/or the original ones might be also required.

What happens if I do not provide the information?

The process of identification and verification is mandatory for regulated financial institutions. In some cases, and depending on circumstances, failing to provide the requested information and/or documents might cause the rejection of your merchant account application or the closure of your already open account.

Conclusion:

As the above mentioned procedure of identification and verification is mandatory for regulated financial institutions, so while preparing your business and website to receive online payments, you should also prepare to provide details about your business and company members.

Daniela Gonzalez

Daniela Gonzalez is Head of Onboarding and Underwriting at PAYMILL. Working since 2014 at PAYMILL, she brings extensive international experience in the industry. On top she speaks 3 languages. Here she writes about Website compliance.