Merchant Account Opening Europe

Nowadays, every business is supposed to accept all debit and credit cards, amongst other electronic modes of payments, at both physical outlets and online. As a matter of fact, this has become one of the major factors in growing and maintaining sales, as large numbers of customers tend to avoid carrying paper money, and cashless transactions are valued at a global level. So, if you are ready to add this mode of payment into your payment ecosystem, you are going to find a merchant account much indispensable.

A merchant account is a type of bank account that enables a business to accept credit and debit card payments. It is usually a contractual agreement between three parties-accepting business, merchant acquiring bank, and merchant account service provider-that renders the merchant liable to comply with the card associations’ rules and regulations.

When the account is already opened, your company will already be a merchant-meaning it’s a business that accepts credit and debit card payments processed by any merchant account service provider and a merchant acquiring bank. The merchants go into categorization depending on the risks related to fraud and chargebacks. This may affect the very likelihood of opening a merchant account, besides entailing higher fees and causing more restricted terms.

One important business partner would be the merchant account service provider, basically because it provides vital services: acting as an intermediary between the bank, your business, and your customers for debit and credit card processing, among other electronic payment means.

Debit and credit cards are processed in the following way:

If you are trading in Europe, you need a European merchant account – your effective way of offering European customers safer and more secure digital payment options.

Benefits of having a European merchant account include:

• Local, most convenient payment methods for European customers
• Increased regional sales, as paying for products or services is made easy
• Can process the transactions received from anywhere in the world
• Complete data protection and adherence to all other relevant regulations are secured.
• Higher card approval rates
• Lower interchange fees
• Economical payment processing
• Greater volumes of processing
• High-risk businesses stand a greater chance of getting a merchant account in Europe than they do in non-European countries.

Things to consider before choosing a merchant account service provider:

• Pricing structure – fixed percentage, tiered pricing or other
• Transaction fees – if a business happens to be of the high-risk type, then higher transaction fees are levied
• Administration fees
• Customer support – spoken languages and time zone
• Hardware supply and maintenance
• Software integrability with other systems used by you
• Understanding of European regulations by the provider
• Security and compliance level – data protection among others
• Understanding of your industry and specific business needs by the provider
• Currencies accepted/processed
• Languages in which the provider can offer their products and services to your customers
• Scalability in case your processing volumes start to grow significantly
• Contract duration

Merchant Acquiring Banks

The Merchant Acquiring Bank is a bank or other financial institution which accepts credit and debit card payments from the card issuers and processes them on behalf of businesses. In other words, the merchant acquiring bank provides an opportunity for a company selling products or services to accept such card associations’ means of payment as Visa, MasterCard, and American Express.

How it works:

• A merchant signs an agreement with a bank
• Credit Granting: The merchant acquiring bank grants a line of credit to the merchant.
• Batch Settlement: The merchant acquiring bank settles batches of funds with card-issuing banks on behalf of the merchant.
• The merchant acquiring bank deposits the merchant’s daily sales transactions, less applicable fees.

Merchant Account Service Providers in Europe

You may deal directly with a merchant acquiring bank to open a merchant account, or you may seek service providers that offer multiple solutions in setting up a number of merchant accounts in various countries.

Because these merchant account service providers partner with merchant acquiring banks to ensure frictionless transactions, they can extend a great number of tools for payment processing. They can make the customer journeys of your customers so seamless and easy that they keep returning.

Payment service providers are licensed to operate in both the EU and EEA under the PSD, which aims to promote competition and increase safety in the digital payment market.

Merchant account service providers supply the following payment products and services:

• eCommerce, online selling and buying of products and services, the ecosystem of which involves a web store and an acceptance of credit and debit cards online
• Forms of payment gateways are software integrated into your eCommerce store or at a credit card terminal to allow you to take and process digital credit and debit card payments.
• Credit card terminals are devices that enable the customer to make a payment by swiping, inserting, or tapping their credit or debit cards.
• Contactless payment devices (they use near field communication or radio-frequency identification to enable contactless credit and debit cards, Google Pay, Apple Pay and other analogical mobile payments)
• Virtual terminals (software applications enabling merchants to accept credit or debit card payments without requiring to present the card)
• Point of Sale (PoS) systems – they’re installed at a place of your store where a customer pays for a product or service
• Other additional features include reporting dashboards, data exports and invoicing.

The most well-known providers of this type of merchant account service among others are Stripe, Square, PayPal, Worldpay, and SumUp.

Requirements for Merchants

First and foremost, your company must be registered as a European company with a physical address in Europe and show proof that it has sufficient capital to support the volume of processing.

Merchant acquiring banks and merchant account service providers base their decisions on the following information:

• Time the business has been established
• History of bankruptcy
• Past credit issues
• Previous merchant accounts
• The susceptibility to credit card fraud

Documents needed:

• Incorporation documents
• An application form with information about the business and its owners and directors.
• A business licence (in case your business is licensable)
• Description of goods or services the company sells. Here, marketing materials are also included.
• Billing, shipping, and returns policy
• Proof of address in Europe
• Information about your corporate bank account, including bank statements from the last few months
• The recent payment processing history of your company
• Financial statements
• Identity document of the signatory of the account

How to Open a Merchant Account in Europe

The process of opening a merchant account may vary depending on the involved parties, however, some of the steps are standard. An application is usually reviewed within five working days.

To open a merchant account, follow these steps:

• If applicable, obtain a trade licence
• Open a corporate bank account
• Define your business needs and that of your customers regarding payment means, credit card brands to be accepted, and the choice of a payment model.
• Prepare documents necessary for the process.
• Compare different acquiring banks in your country.
• Compare different merchant account service providers across Europe.
• Apply for an account with any of the acquiring banks.
• Get approval from an acquiring bank.

Although opening a merchant account in a European bank takes quite a lot of effort because of the greater demands on enterprises, our team in the Regulated United Europe is prepared to serve you in the most efficient way. Already for eight years, our company has professionally supported clients in opening bank accounts all over Europe. Through our large network of trusted partners in the European banking industry, we are in an ideal position to make adequate and less expensive solutions available that improve the performance of the companies we serve.