I am launching an e-commerce business and want to know how I can receive payment from my clients, who will mostly be in the US. What should I do?
You will need a merchant service account. This will give you the ability to accept payment from your clients online. There are three steps in the process of securing a merchant service account.
Step 1. You need to form a US company.
Your new corporation or limited liability company (LLC) will give you legal protection and will also signal a large company standing behind the business. Most importantly, it is the first step in being able to secure a merchant service account, which will allow you to accept credit card payment online. Although your company may be formed in any state, most overseas businesses are best served by incorporating in Delaware, Delaware corporations are less expensive, easy to keep in good standing and private. In addition, they are formed under the laws of a jurisdiction considered very “corporate friendly.”
Step 2. You will need to open a US bank account.
This can be a difficult step. However, if you have your corporate formation documents, documents that identify you personally, proof of a banking relationship in your home company and a compelling reason for which you need a bank account (such as most of your clients are in the United States) you should able to achieve this. Banks are very cautious institutions so it is crucial to approach them with everything in perfect order. Banks operate under the principle of better safe than sorry; it is easier to reject an applicant whose documentation is not perfect than to take unnecessary chances.
Step 3. Securing a merchant service payment system.
Once your bank account is open you may determine your eligibility for a merchant service account. The first stop for many new businesses is PayPal. With a US bank account you can normally set up the ability to accept payment. An added benefit is that many customers love PayPal because they do not have to provide credit card information to “strangers on the internet.”
As your business develops you may wish to establish a merchant service account with a bank related company to accept VISA, MasterCard, etc. payments. In this area all processors are either banks, or resellers for banks. Here again you will encounter the conservatism of banks. However the lower rates you will pay for the service make this a worthwhile path to a more profitable on-line company.
The best way to obtain a merchant service account, at the lowest fee rate, is to comply with the requirements in an orderly way. Form a US company, open a US bank account, then you will have the ability to secure merchant services. Your e-commerce business can greatly simplify the payment step on your path road to success!