Obtaining Merchant Account

[DARUKE]

Hi,

My business partner and myself are in the process of starting a LTD company by shares. We have approached HSBC bank and already have had a promising outcome. We are going to meet with our accountant tomorrow to set up our business on company house and acquire our company registration number. He will also help us complete our predicted P&L account for next 6 months.

We are both engineers by trade for satelite equipment installation and repairs. We have 2 other employees with all equipment and transport ready to start. We are looking to cover a radius of approx 40 miles from our location. The problem we have is taking deposits from our customers prior to arrival for the callout to cover general expenditure which will be deducted from the final cost of the repair/installation. The method of payment we have found most suitable is the use of a CNP payments via a virtual terminal. In our initial meeting with HSBC we briefly enquired of a virtual terminal for said reasons above and were advised it is done seperately with a subsidery of HSBC itself. We know through research that merchant accounts in general are, in many cases, difficult to aquire. Obviously, this is a major part of our business as you can see. What we would like to know is based upon information we have submitted, how likely is it that we will be granted with a virtual terminal? Is there anything we can do to make our application have a greater chance of approval? Can you get merchant bureau services for a virtual terminal (3rd party merchant account)? Any help will be greatky appreciated.

Kind regards

Daruke

 

[TotalWebSolutions]

Hi Daruke,

As you are a new start-up then your application for an internet merchant account will all be based on projections and in that respect the acquiring bank will have to ascertain the risk you pose to them as a business as well as the monthly return generated by transactions. Whilst you are in contact with HSBC for setting up the business - I presume you will be getting a business account with HSBC - you will indeed need to get the merchant account from their merchant services team.

If you have already applied for this are you planning to use their own Virtual Terminal? If not, you could save some money by using our own Virtual Terminal which works in conjunction with an Internet Merchant Account from HSBC (and also Barclays and Streamline).

We have direct contacts within the merchant services department of HSBC so if you have not pursued this yet feel free to drop me a PM and we can discuss this further.

Thanks,

Simon

 

[DARUKE]

Hi,

Thanks for your response. Our bank manager is sending off the application for the merchant account. Before this is done we would like to gain as much advise as possible to increase our chance of approval with as little hassle. We are looking to take 10 payments of £20.00 a week as part payment before attending the call out via virtual terminal. What we really want to know though is £800.00 a month through virtual terminal classed as high risk while our application is being processed? Should we under/over forecast to get a better a chance of success? Or would this be, based upon a business point of view, classed as an insignificant amount of money to warrant a merchant account in the first place? This is essential for the way our business operates for it to be successful in the long term. Figures shown here are based upon the initial set up of the business and will obviously increase as the business expands.

Kind regards

 

[Megahertz]

Hi,

We use Paypal for our credit card processing - it's cheap enough if you pass a threshold (about £1500 per month) and it works well. When you apply they tell you that you can integrate PayPal into your website, and also use Virtual Terminal. However, my experience is that they don't usually let you have VT until you have built up a bit of trading history (and in our case, filed accounts with Company's House.)

One solution might be to ask your customers to pay online - you could easily add a 'pay deposit of £20' button onto your website, although I agree it is a pain getting your customers onto your website.

The other possibility is getting a credit card machine in your premises, and then asking the bank about how to do a 'customer not present' transaction.

 

[TotalWebSolutions]

Hi Daruke,

I have responded to your PM

 

[Shopcetera]

You dont have to use those you bank with for your merchant account either.

HSBC were the most expensive when we first enquired and every time since in the last 10 years.

Try BOS, who will be about half HSBC's rates!

 

[Shopcetera]

Although dont expect much in the way of support!

 

[davidakerr]

Contact the Federation of Small Businesses and request information on their partnership with Streamline................their rates are probably a lot less then HSBC plus there are lots more benefits to help and protect small businesses

 

[Deleted member 106254]

If you both have a clean credit history and a good business plan then you should have no problems getting a merchant account.

 

[DeanCo]

We know through research that merchant accounts in general are, in many cases, difficult to aquire.

We have seen the most people obtaining merchant accounts through streamline very easy. If you and your company have a good credit history, I am confident you can get a terminal within a few weeks

 

[BobbyBoy]

We have seen the most people obtaining merchant accounts through streamline very easy.

I've had an account with Streamline for 15 years now - never had a problem or a chargeback in all this time.

Called Streamline a week ago to get another merchant number as we are planning to change our payment processor due to technical issues.

Was told that I'd need to speak to a member of their sales team as I queried their £70 set up fee - have heard nothing since, even though we were promised a call within 72 hours.