How long does it take to get approved for a merchant account?
Posted by Jeff Shavitz on Tue, Sep 22, 2009 @ 01:26 PM
Typically, it can take 3-5 business days for a merchant service provider to approve or decline a merchant account application. For the most part this is true, but a number of different factors have an affect on how long it takes for approval, including:
Personal Credit - this is the single-most important factor a processing bank considers when determining whether or not to issue a business a merchant account. Personal credit will not only determine the length of time it takes a processing bank to approve a merchant account, it is likely to determine whether they approve the merchant account at all. A strong credit standing will speed up the merchant account approval process whereas weak credit history will slow the approval process and may cause the merchant account application to be declined.
Business Type - the type of business or the way a business conducts itself carries different associated risks to processing banks. There are a number of different factors that can make a business fall into a high risk category where the business would need to obtain a high-risk merchant account. If a business is considered high-risk, the bank will scrutinize the application more closely and the merchant account approval process will take a little longer. It is important to note that individual processing banks use different criteria to determine if a business is high risk, so if you are having trouble getting approved you may want to try applying through another provider.
Monthly Processing Volume - When applying for a merchant account, you'll need to specify how much you expect to process each month in dollar volume of credit card sales. The higher your processing volume, the longer it may take a processing bank to approve the merchant account. Declaring the correct processing volume for your business is very important and you should never declare a lower processing volume than what you actually expect it to be just so you can get approved for a merchant account quickly.
Season - When you apply can also affect how long the approval process takes. A merchant account application submitted just before the holidays will take longer fore a processing bank to approve than an application submitted during a slower time of year due to the volume of business that a processing bank must deal with.
Instant Merchant Account Approval - although it is certainly possible for a merchant account to be approved almost instantly or well within a 24-hour period, it is not the norm and it is difficult for a merchant account provider to guarantee.