Not only is Genome proud to be a part of Lithuania’s Fintech landscape, but we are now also facilitating payments for Lithuanian national parking, after winning a tender. It means that any driver can now pay for parking fast and securely if they are in Vilnius, Kaunas, Klaipėda, or Trakai, as we help out around 30 thousand customers per month. The Municipal Enterprise has updated its infrastructure to accept more transactions and provide clients with delay-free services. The decision to widen available payment methods options grew because previously it was available only for Mobile operators’ clients with monthly subscriptions. That forced tourists
Many types of bank accounts cover pretty much everything that people look for – from checking and brokerage to savings. But what about the basics? That’s right, today we’re talking business and merchant accounts!
You see, not all clients sure, if they are required to have both these accounts, and what are their purpose. That’s what we talk about in this article.
What is a merchant account? Do you need one for a business?
A merchant account is a type of bank account that allows companies to accept electronic payment transactions for their goods and services. So, if you are a business that sells things online, you can’t operate without a merchant account – provide your clients with a credit card payment method and its alternatives.
The same goes for physical stores – to let your customers use payment methods other than cash, a merchant account is in place.
The fees you pay for merchant account opening and maintenance differ among banks and Fintechs. Most commonly, you will have to pay much more if you have a high-risk business. Being high-risk means that a company either has a short/bad credit card processing history or is a part of an industry that is more prone to chargebacks than other sectors. Read more about chargebacks and how to prevent them in this article.
Why do you need a merchant account?
As mentioned before, you cannot accept online payments and electronic transactions without a merchant account.
Getting a merchant account entails some steps for e-commerce companies. Their website should contain information on the payment methods they offer, clearly established policies, they must comply with Payment Card Industry Data Security Standard (PCI DSS) and PSD2 – the Revised Payment Services Directive (the latter is relevant to the EU and the UK merchants). You can learn more about starting an e-commerce business and setting up your website in this article.
Side note: the PSD2 compliance deadline for the EU merchants expired December 31, 2020. Companies from Great Britain need to be comply-ready before September 14, 2021.
But what about businesses that work in retail – do they have to have a merchant account? If their store works with electronic money transactions – yes, they do. Of course, there are cases when a physical shop only accepts payments in cash, like some small local stores.
Still, we highly advise these stores to start merchant accounts as well. More and more people start using cash alternatives when shopping, and the year 2020 influenced the retail and e-commerce spheres greatly. That’s why it is more rational to offer customers as many payment methods as possible, otherwise you risk losing clients altogether.
What is a business account for?
With all the talk about merchant accounts, you might be wondering – what are business accounts for then? The thing is you can’t get a merchant account without a business one.
A business bank account is an account that is used for all business transactions. With it, you can make payments for corporate services, business trips, and vendors, pay your employees, and accept money for goods and services.
Thus, a merchant account is usually considered a type of business account that represents an agreement between a company, its bank, and a payment processor for processing electronic transactions.
As a rule, a merchant account only exists to accept payments – you can’t withdraw earned money from it, but these funds are later transferred to your business account, which you can now use. It takes from a couple of days to a week to transfer money from merchant to business account, the time depends on a bank you work with.
So, if you need to accept payments on your website or in your store through non-cash methods, you are required both business and merchant accounts.
In other cases, just use a business account for salary payouts and other expenses. But why not use a personal account for that? There are several reasons:
- You don’t want to mix your finances with corporate ones, at one point you risk running short with one of these things;
- Another reason you don’t want to mix personal and company money is taxes. Dealing with taxes is already exhausting, so why make the process even more complicated by figuring out which were your business and personal expenses;
- If you will need the help of lenders and investors, they will look into the way you do business, and mixing your finances will not seem reliable;
- The payment processor you work with can drop you if they find out you use a personal account for corporate activities.
Check out this article for more information about business accounts.
Open business and merchant accounts within Genome
Whether you want an account for corporate expenses or a way to offer clients contactless payments, or even both, Genome has all you need. That’s right, with us you can open business and merchant accounts online, without long lines and big piles of documentation.
Genome’s business account is perfect for running your company’s banking operations online the way you prefer, it offers instant payouts and international money transfers. Track all your funds and transactions from the office or in the privacy of your home.
Not only that but soon our physical debit and virtual cards will be available for all your corporate needs. Pre-order the cards here.
For a detailed tutorial please check out our blog on how to open a business IBAN account with Genome.
Merchant account opening is as easy with secure KYB and verification processes. You will start accepting payments for your goods and services 72 hours after onboarding. You can open as many MIDs as you require, and offer your clients 25 alternative payment methods to go with.
You can also get Genome’s merchant account if you use these platforms: Shopify, PrestaShop, OpenCart, OXID, WooCommerce, Magento, and Drupal. All you need is to install one free plugin for this integration.
All the money you will get from purchases are easy to track, and the transactions are secure with build-in anti-fraud tools from Covery.
For a detailed tutorial please check out our blog on how to open a merchant account with Genome.