When starting a business, it is important to have a system in place to process and receive payments. This can look like having two separate accounts to operate with different functions, but how does this all work?
A merchant account is a type of business bank account that allows you to process credit cards, debit cards, and other electronic forms of payments securely. It is the intermediary between the business and the card-issuing banks that your customers use to make payments or purchase products.
How Are Funds Paid
Unlike a traditional bank account, the merchant account cannot move funds in and out. Instead, the merchant account will advance the business owner’s funds typically within 1-2 days, however, the merchant provider will wait a little longer to be paid funds from the issuing bank.
Having a business checking account in place will ensure that your payments are processed quickly and securely, however choosing the right checking account can be a bit of a task.
Business Bank Accounts
Now that we have a better understanding of a merchant account, let us dive a little deeper into the world of business bank accounts. Now in an ideal world if you want to accept credit cards, debit cards, and gift card payments then having both a merchant account and a business bank account is going to be key.
Business bank accounts are used to house your ongoing and outgoing cash flow. This can be the revenue that is generated from your sales, payroll, and expenses.
You can open a business bank account at a local credit union, bank, or even online. It is important to note that finding a bank account with great fees will be something to consider as you begin shopping for your bank account. Also, most banks offer various products so finding one that can offer you additional services like funding, credit cards, and more will also be good.
Why Having Both Accounts Are Beneficial
At the end of the day having both a merchant account and business bank account together will make your business run smoothly. There are other types of accounts such as Stripe, PayPal, or others, however typically with those types of accounts, you will run into tighter restrictions, delays in funding, and higher fees.
How to Apply for a Merchant Account
If you are looking for a hassle-free way to start accepting payments today, then reach out to one of our friendly 5 Star Processing team members and they will go over all the exclusive perks available for our new members. You can reach them today at [email protected].