Compliance Guide for Merchant Accounts: The onboarding process

Your e-commerce shop or streaming service is the gateway through which information is shared, transactions are conducted, and connections are made with your customers. It holds great possibilities for the success of your business, but with this potential comes a responsibility to ensure trust, security, and legal integrity.

This is why compliance is a cornerstone of your online presence, especially with the heightened regulatory requirements for high-risk merchants.

Compliance Starts at Onboarding

At the start of the merchant account onboarding process, your payment processor will ask you to submit the following documents and information as part of customer due diligence. 

• Certificate of Incorporation (COI) (known as a Certificate of Formation (COF) in the United States). Not all Limited Liability Corporations have a COI or COF, in which case you could provide any corporate setup documents.
• Memorandum and Articles of Incorporation (Corporate bylaws for US merchants)
• Six months processing history, including the number of transactions, refunds and chargebacks per month. If you don’t have these available, provide as much history as possible or indicate you are a startup business
• List of URLs and long-term access credentials (if applicable) 
• Certificate of Directors
• Certificate of Shareholders
• Certificate of Address as shown on a bank statement or utility bill dated within the last three months. The statement or bill must be issued in the name of the company and contain its official business address.
• Company bank account details (Beneficiary Full Name, Beneficiary Bank, Account Number, Routing number/Bank code, IBAN, SWIFT/BIC) 
• Shareholders / beneficiaries who own more than 25% of your business and all directors and signees may be required to submit:
  • Copy of passport or ID (driver’s license cannot be accepted)
  • Proof of address dated within the last three months
• Companies based in the United States may need to provide:
  • Voided check or bank reference letter
  • SSN (Social Security number)
  • EIN (Tax ID)
  • Copy of unlocked “Who Is” for all websites
• Companies with a transaction volume exceeding $100,000 USD per month, may need to submit:
  • Business financial statements OR two years of filed business tax returns
  • Personal financial statements OR two years of filed personal tax returns

 

Translation of documents

Documents are not required to be translated into English. However, if a translation is available, include it with the original document.

Proof of address

Documents that may be accepted as proof of address, include utility bills (gas, electricity, water, telephone landline), tax bill, insurance, and bank or credit card statement. Documents containing a P.O. box address typically are not accepted.

The proof of address should be current within three months of the application date.

Merchant Account Onboarding Process

Step 1. After you have completed the upload of your documents, the account manager at your payment processor should contact you to discuss your business and payment processing requirements.

Step 2. Once your application has been reviewed, your payment processor should inform you whether your business can be placed with an acquiring bank.

Step 3. Your site and business details will then be passed to the compliance team who will check your site. The checks include both legal and card scheme regulations. Your account manager should alert you to any changes that are needed for your site to become fully compliant.

Step 4. When the necessary changes have been made, your application will be sent to an acquiring bank. The acquirer may ask for additional changes for your site to conform to the acquirers regulations or additional documentation.

Step 5. The acquirer will review your changes and, at this point, your account will be approved or declined based on the acquirers requirements.

Step 6. Upon approval, your account details will be added and set live by the payment processor, who should also send you technical integration guides. Examples of such guides are available on our website.

After the integration has been tested and confirmed to be working, you can begin processing sales!

 

Bottom Line

The regulatory and card company requirements for onboarding are stringent. By working with an experienced payment processor who understands the unique needs and challenges of high-risk merchants, your business can experience a seamless onboarding process.

Stay tuned for Part 2 of this blog where we discuss website compliance. If your business includes online sales of CBD products, learn more about getting a merchant account for your business.