2010 Will Prove To Be Better For Merchant Account Applications

Some brief history and a few definitions to begin this one:

Back in the early days of the internet in 1999, the only way you could process credit card transactions properly under your business name was to use a traditional bank-assigned merchant account. It was a long agonizing process to get it started, it absolutely required a business checking account, there was at least $300+ worth of fees to pay, and in many instances you were under a “probation” period of six months to establish trust with the merchant provider. Remember – these were early times so banks were very cautious in those days as internet was largely untested ground.

It’s also important to bear in mind that PayPal did not offer merchant services at this time. That did not occur until years later.

The reason I know all this stuff is because both Dave (owner of PCMech) and myself acquired merchant accounts the traditional way. I personally dropped mine because I no longer needed it, but Dave obviously still has his and transactions made through that medium show up as his business name on your statement when buying through PCMech.

In today’s internet, setting up a merchant account is easy because you can simply use someone else’s, such as PayPal, Lulu, CreateSpace and so on.

But maybe you want to set up your own merchant account so your business name appears on transactions made from your web site.

And maybe in 2009 you tried to do this but didn’t get very far with it.

The reason you didn’t is because the credit industry in 2009 was, in a word, crappy. Credit institutions simply didn’t want to talk to anybody, and in the instances they did were only allowing very small monthly transaction limits of $1,000 or less. For many business owners this simply isn’t worth it as they would need $5,000 or more of allowed monthly transactions to process.

Credit card processing in the now

If you intend to sell things via your web site or even with a traditional storefront, PayPal is in reality not a bad option as it once was. The business-grade accounts can allow for your business name to appear on customer statements.

One of the very-old but very-good traditional merchant providers is Authorize.net. They have been doing the credit thing more or less ever since consumer internet started and have much tenure in the field. They do both online and retail styles of credit transactions and work very well.

However none of this mattered if the credit institutions weren’t willing to trust merchants like yourself a little more.

While 2009 was crappy in the business credit department, 2010 will be much better. This is due to the fact the U.S. government has instructed the credit institutions to ease the restrictions both for consumers and business owners. This has already started to take effect but will be in full swing once the new year is here in 2010.

If you’re a business owner and wanted the ability to accept credit cards but didn’t have much luck, try again in 2010. The difference should be like night and day – in the positive direction for you.

On a final note: The less-restrictive credit requirements should also apply if you’re not in the US – but they may take slightly longer to put this into effect compared to the US (as in 2nd or 3rd quarter 2010).