Merchant Accounts – What Can They Do For Your Business?

We all must have heard that a merchant account is needed for online money transactions with the help of debit and credit cards. But what exactly is a Merchant Account?

A Merchant Account is the account where the transacted money goes till the time it reaches the destined account of the merchant/businessman. The merchant account acts as a connecting link among all the different card transactions so that the money gets smoothly transferred from the consumers’ bank account to the business owner’s bank account.

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Following are some characteristics and specialties of Merchant Account

1. Merchant Account is also called a holding account for the money being transacted until the payment processing is completed.

2. Merchant Account Service providers directly deal with the card networks and processors for smooth transactions.

3) Every Merchant account has a unique merchant ID for every business.

4. Merchant Account also provides extra security for every card processing and transactions, etc.

Along with the Characteristics come the advantages, and the following are some advantages of having a Merchant account for your business.

1. The most basic but very important benefit is that you can accept credit card and debit card payments for your business. Having more payment options help in the increase of business and there is easy money flow possible.

2. The first advantage connectively brings the second one. Where there is an increased rate of money processing through cards there is an increased rate of sales for any business.

3. Cash Management and handling become far easier due to online transactions made available by the merchant account.

4. There is zero possibility of bounced checks when there are online transactions, the hassle and penalty fees caused by bounced checks can be avoided by switching to online payments.

5. Merchant Account provides two way convenience, the flexibility in payment processing delights the customers and happy customers make the Business owners happy.

All this reasons are more than enough to tell you why a Merchant Account is needed for any small or large business.

What You Need To Know When Applying For A Merchant Account in UK

Merchant Account is a form of line of credit that a processing bank extends to the merchant, in other words, a merchant account is a settlement between a retailer/business man, a merchant bank and payment processor who tries to settle online money transactions through credit/debit card. First the funds are deposited in a merchant account when a online card transaction in done by a customer and later the business bank account receives the funds on daily or weekly basis. Even if it’s a small scale business, to accept a online card payment you need at least one internet merchant account.

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Requirements For Applying Merchant Account :

Even after a high competition of issuing merchant accounts, the process for the same is not a hectic one only a variety of criteria are verified before approval of merchant account application. The criteria include the following:

Business type – to determine the level of risk involved in online transaction frauds and returns. This does not tell us that business with higher risk wont be approved but in the initial stage the vendor may ask for higher fees as a compensation for the risk so that if you have gone out of business or cannot cover any chargeback amount, your processor is the one who will take the hit.
Business Time Length – to determine the length of time in business.
History of Business – The history of business is verified to check any faults in it, if there has been any Bankruptcies or and complaints against the business.
It also verifies if the applicant has had a merchant account or has he/she applied for one earlier.
The personal information of the business owner is also verified, especially his/her personal credit history.

For newbies in business, there are a lot of chances of having a favorable review for application of Merchant Account from the bank that holds the owner’s business/personal account.

How to get CBD Merchant Account Solutions?

Products containing CBD used for medicinal propose were officially recognized as a ‘medicine’ by the Medicines and Healthcare products Regulatory Agency (MHRA) in 2016.

And as of last year the use of CBD oil has been made 100% legal in the UK for medicinal purpose only.

CBD stands for cannabidiol, one of many cannabinoids found in the cannabis plant. CBD tests have shown medicinal properties and health benefits like helping reduce seizures in cases of epilepsy, help with anxiety, treat chronic pain and act as an anti-inflammatory.

While some are still apprehensive about using it, CBD oil usage has seen an impressive increase since being legalized with more and more people being aware of the medicinal advantages it offers.

The effects of its slow yet steadily increasing popularity can be seen online with a large number of businesses selling CBD oil and related products. There are also a few key food health stores selling CBD oil products to customers.

Why the CBD Oil Industry is considered High-Risk?

The expression, Cash is king, rings the most true with Cannabis industry.

Despite the selling of CBD oil being made a completely legal business, the merchants are still forced to deal in cash due to the constant security threat and industry stigma. Banks and payment processors are highly wary of undertaking such businesses on board, understandably due to the huge risks involved.

CBD oil is extracted from cannabis and tied to marijuana which makes it a high risk industry. And similar to other high risk businesses, processors rarely accept applications of CBD merchants.
Many of these financial institutions have little idea how the industry functions because it’s relatively new.
In spite of the various proven health benefits broadcasted by CBD oil consumption, there are also side-effects to it. The controversial nature of selling CBD oil has led banks and processors to shy away from the industry.
Banks are afraid of reputation damage caused by taking on such businesses.
There are huge risks and too many legal hurdles to cross in terms of CBD businesses.

CBD oil Merchant Account Processing

With the many uncertainties and reservations surrounding the industry, CBD merchants can still find willing merchant account providers offering CBD industry-specific merchant account solutions.

Basic essentials required to open a CBD Merchant Account:

A legally compliant business
Positive & Long credit processing history
Healthy rolling reserves
High monthly volume
Low chargeback ratio

The key to finding the right merchant account provider is to find one who provides industry-specific merchant solutions. In the case of CBD merchants, a High Risk merchant account provider specializing in CBD merchant accounts would prove to be an apt fit.

A merchant account provider having significant experience in this industry will be aware of the workings and risks involved with the business offering services deemed fit for your business. Such processors will also help a merchant mitigate and lower risks by offering tools for the same.

A secure payment gateway is imperative with majority of CBD products sold online. Look for processors that integrate payment gateways with merchant accounts. There are plenty of reputable merchant account providers offering both, IBS being among one of the top-rated processors. Since CBD merchants deal with high risk products, a payment gateway that is PCI compliant is of paramount importance.

Securing a High Risk Merchant Account for CBD oil and related products is made easier with the right processors!