How to Open a Merchant Account

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3.11.2021 Finances

How to Open a Merchant Account

There's the old way, and then there's the easy way.

For many small business owners, the time and energy it takes to open a merchant account is an unnecessary hurdle to getting paid. The effort you’ve already put into getting your business off the ground is momentous; now you’ve got to send a fax, sign an unyielding contract, pay more fees, and suffer through an archaic onboarding process.  

It’s for these reasons that more than two-thirds of Australian businesses prefer a non-big 4 bank. Suffice to say, the old-school approach to business banking — where the financial provider’s interest sits firmly with big business — has shown its cracks. Most small business owners don’t have the luxury of dipping into generous wealth reserves when traditional banking grinds cash flow to a stop. Instead, these merchants are often faced with delayed launches and impeded growth, purely for the fact that banks can’t help them get their ducks in a row fast enough.

Business owners of every size deserve the kind of agility and attention that’s afforded by modern tools, tech and support, and that’s exactly why so many merchants are migrating to modern alternatives like  Zeller.

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What is a merchant account?

Separate to your own personal accounts, a merchant (or ‘business’) account provides a dedicated place to accept deposits and make payments from. Traditionally offered by conventional banks with rules and processes for business banking now set in stone, merchant banking has benefited from a modern evolution in recent years — one that’s seen digital banks and neobanks introduce alternative offerings that don’t shackle merchants to high interest rates and lengthy processing times.

Typically, business owners pay standard monthly account and minimum deposit fees, as well as cover the costs of any extra features or services — but that’s not always the case. Zeller Transaction Account, for example, costs absolutely nothing to open when you sign up for Zeller, is completely fee-free, and can be set up online in minutes.

A number of merchant account options exist in Australia. It’s important that you do your research before signing on the dotted line, or else you could find yourself footing the bill for hidden fees for years to come.

Who can open a merchant account?

Generally, any business owner can open a merchant account for their enterprise. However, a bank (or any financial services provider you select) will need to consider a number of factors before approving you. This includes your credit history, operating history, recent chargebacks and credit risk.

For new business owners, this can make opening a merchant account difficult without a financial history or proof of revenue (something you no doubt plan to accrue as soon as you have access to your account). 

How do you open a merchant account?

So, the question remains, how do you open a merchant account as a new business owner? In short — it all depends on where you’re applying. If you’re going through a big bank, this typically includes lengthy phone calls; the printing, completion, certification, scanning, and exchange of multiple documents; and several weeks spent waiting for a response. You’d best get your paperwork in order as soon as possible, if you wish to transact in the near future. 

However, if you go through an independent alternative such as Zeller, you can sign up immediately and be onboarded within minutes. If an issue gets picked up in the process, our Risk team is on hand to iron out any bumps along the way and get your account up and running as soon as possible. Why do we make opening a merchant account infinitely easier than a bank does? Because we understand the importance of getting started; Zeller was born to help small Australian businesses grow.

It’s also why we wrote this guide to opening your merchant account — to make accessing your cash even easier.

How do you use your merchant account?

The beauty of choosing a modern alternative like Zeller is that you can unite your entire payments system, so your software is always talking to each other and settling transactions on the same day — allowing you to invest in scaling up sooner.

Once your merchant account is open and your Zeller EFTPOS Terminal is set up, you can start accepting payments on and off-site effortlessly, from wherever business takes you. The terminal can be connected via WiFi, personal hotspot or SIM card — so you can take payment where convenient. 

After payment is accepted, the customer’s card details are sent from the card reader to the payment gateway, before then being forwarded onto the payment processor. This information is then send to the card network before being forwarded to the customer’s bank. If sufficient funds are in the account, the transaction is officially authorised, which is then communicated to your card reader. 

Typically, these funds will then be deposited in your business account between one and seven days later. However, with Zeller, settlements are processed and sept into your account nightly — allowing you to spend funds sooner with your free Zeller Mastercard.

Now that you know how to minimise the cost and hassle of your merchant account, while maximising your access to cash, it’s time to optimise the rest of your business. Signing up for Zeller is free: no contracts, no ongoing fees, and no hidden charges. 

Ready to get started with Zeller?