Merchant Acquiring License for Entrepreneurs
Credit card companies offers two types of licensing agreements from financial institutions, one is the license to issue credit cards and the other is the merchant acquiring license.
So what is a Merchant Acquiring License? to define it, it is the permit to accept credit card payments for goods from a customer regardless of his card-issuing bank, and then to reimburse the merchant from whom the customer bought the goods. Credit card companies offers two types of licensing agreements from financial institutions, one is the license to issue credit cards and the other is the merchant acquiring license.
There are many card issuing banks in our country but few have the capacity to offer merchant acquiring license to businesses. The few banks that can offer it are Citibank, HSBC, Bankcard and Equitable Cardnetwork. If you have a business and want to accept credit cards as payments, you must secure accreditation from a merchant acquirer. Get and submit a filled-up application form with the necessary documents. After you are approved, they will install a point of sale terminal (the gadget that swipes your credit card) in your store and along with it a door sign or stickers that announces you accept credit card.
Although the point-of-sale terminal is free, there is a cut or a percentage deducted on every sale of the merchant and depends on the kind or goods or services. For example, drugstore has a different percentage cut compared to food services.
Also, it is not easy for you to be approved. The business location and the amount of sale have a significant factor before approval. Reimbursement to the merchant from the merchant acquirer usually takes two to three days in the form of check or bank deposit. So what is the advantage of having a merchant acquiring license? first is convenience to the customer and impulse buying that helps boost sales.