Most online stores start with an all-in-one payment service because it’s quick to set up. That works well until a growing store has its payouts paused, or gets a closure email with little explanation. Then the store owner has to find a provider in a hurry, which is the worst time to do it.
This guide explains the difference between the two kinds of account, the signs that your store has outgrown a shared one, and what to compare when you choose a provider.
All-in-one payment services and merchant accounts
Services like Stripe, PayPal and many built-in store payment options are payment facilitators. Lots of businesses process under one master account, so you can start quickly with little review. The trade-off is that they assess your business after you’ve started selling, and they can act quickly if their systems see something they don’t like.
With a dedicated merchant account, your business has its own account with an acquiring bank. There’s more paperwork at the start, because the bank underwrites you up front. In return, that review covers your real products, ticket sizes and volume.
Neither is better for every store. A small store with low-risk products may be well served by an all-in-one service. Dedicated accounts tend to suit businesses where stability matters more than a same-day start.
Signs your store has outgrown its current setup
- Your payouts have been held, or you’ve been asked for documents without warning
- Your sales are growing quickly, or you have large seasonal peaks
- You sell a product your current service restricts or may restrict
- Your average order is large, or you have occasional very large orders
- You ship slowly, take pre-orders, or sell from overseas suppliers
- Your chargebacks are rising
- One account closure would stop your whole business
The last point matters even if everything is going well. If your revenue depends on one provider you can’t reach by phone, it’s worth having a plan.
What to compare between providers
- Does it support your industry? Ask whether the provider works with your exact products, not just “e-commerce”. Then ask whether the bank has approved them.
- Who actually underwrites you? Ask which bank or banks they use, and whether they have more than one option if your first application is declined.
- Total cost. Ask for every fee in writing, including monthly charges, gateway and chargeback fees, and any reserve. A low headline rate tells you very little on its own.
- Contract terms. Check the length, how renewal works, and what it costs to leave.
- Reserves and funding. Ask how and when you get paid, and what could change that. See What Is a Rolling Reserve, and Why Do High-Risk Accounts Need One?
- Compatibility. Confirm the gateway works with your store platform, subscriptions, tax and fraud tools.
- Fraud and dispute tools. Look for address and card checks, 3-D Secure, alerts and help with dispute responses.
- Other payment methods. ACH and eCheck can suit big orders and customers who prefer not to use a card.
- A person to talk to. When funds are held, you’ll want a named contact who can tell you what’s happening.
Know your chargeback numbers
Whichever provider you choose, card network monitoring programs apply. In the US, Visa’s Acquirer Monitoring Program (VAMP) measures fraud and disputes against your settled transactions, and that ratio has become stricter over the past year. Mastercard flags merchants through its own chargeback program based on the number of chargebacks and their ratio to transactions.
Your processor can tell you your current ratios and the limits that apply to you. Check them every month, so a rising trend doesn’t take you by surprise.
What you’ll need to apply
- Business registration and owner ID
- A voided check or bank letter
- Recent processing statements, if you have them
- Your average and largest order, and your monthly volume
- A live website with products, prices, refund and shipping policies, and contact details
- Your supplier and fulfilment details
A provider that asks for all of this up front isn’t being difficult. It’s checking the things that would otherwise cause a problem later. If you run a drop-shipping or high-ticket store, see also Merchant Accounts for E-commerce, Retail and High-Ticket Merchants.
Red flags when choosing a provider
- Promising guaranteed approval before seeing your business
- Offering to describe your products as something else
- Refusing to put fees or contract terms in writing
- Being vague about which bank is behind the account
- Pressuring you to sign the same day
A misdescribed account can be closed at any moment, and it can leave you with held funds and a listing on the MATCH list. See Applying for a High-Risk Merchant Account? Here’s How to Prepare.
Frequently asked questions
Can I keep my current payment service while I apply?
Yes, and it’s often sensible. Applying before you have a problem gives you more choice. Some businesses keep a second account as a backup.
Do I need a merchant account if I use Shopify or WooCommerce?
Not always, but you can usually connect a store to a dedicated account through a compatible gateway. Tell us what platform you use when you apply.
Does a new store qualify?
Often, yes. Without a processing history, your website, products, supplier details and business plan matter more.
My store isn’t high risk. Is this for me?
Possibly. Safe Merchant Solutions works with lower-risk businesses as well as high-risk ones, and we can tell you if a simpler option makes more sense.
Talk to a provider before you need one
Safe Merchant Solutions has over 15 years in high-risk processing and more than 25 banking partners, so we can match your store to a bank that fits your products and growth.
Get Approved or start a Live Chat to talk through your options.
