A merchant account is essential for any e-commerce or retail business in 2025. It allows companies and freelancers to accept electronic payments securely, whether online or in-store.
Let’s explain what merchant service providers are, who can get a merchant account, how to choose the best provider for payment processing, and explore what defines the best merchant service providers today.
We’ll also show why Genome stands out as one of the top choices for businesses, as our merchant services will be launched soon, and guide you on switching providers if needed.
What is a merchant service provider?
A merchant service provider (or merchant account service provider) is a financial company that enables businesses to accept cashless payments – for example, by issuing merchant accounts and processing credit card or digital transactions.
These providers supply the merchant account (a special bank account that receives customer payments) and related merchant services like payment gateways, payment processing, point-of-sale systems, fraud prevention, and more. In short, merchant service providers give businesses the tools and accounts needed to process electronic payments from customers, whether through credit card processing, debit card terminals, or modern online payment platforms. Choosing the right merchant services solution ensures businesses can accept credit and debit cards, digital wallets, and other methods securely and efficiently.
There are a few types of merchant service providers. Acquiring banks (merchant acquiring banks) are fully licensed banks that can directly issue merchant accounts to businesses. Banks tend to have stricter requirements and longer contracts for merchant accounts, so they often cater to larger, established businesses. Other providers operate online as Payment Service Providers (PSPs) or Payment Gateway Providers (PGPs), partnering with banks to offer merchant accounts and payment processing on behalf of those banks.
PSPs and gateways are usually more flexible and faster to onboard, making them popular with small and mid-sized businesses and freelancers. They typically charge simpler fees (often pay-as-you-go per transaction) and have quick, fully online payment setup processes. In exchange, they use an aggregated account structure for merchants or rely on their banking partners for the actual merchant account issuance. For many, these PSPs provide an accessible entry point into the world of merchant services while maintaining reliable credit card processing.
In summary, a merchant service provider is your gateway to accepting customer payments. Whether it’s a bank or a fintech company, the provider will set you up with a merchant account and the services needed to take credit and debit cards, digital wallet payments, alternative methods for merchants, and more. By offering advanced merchant services, providers support businesses in scaling their payment processing capabilities and ensuring secure, compliant transactions.
Who can have a merchant bank account?
Who is eligible for a merchant account? In general, any legally registered business or entrepreneur can apply for a merchant account. If you own a company (whether it’s a small business or enterprise) or you are a sole proprietor/freelancer, you can obtain a merchant account as long as you have the proper business credentials. Many merchant account providers offer different payment options to fit these needs, from in-person card terminals to online payment gateways that support credit card payments and digital wallets.
The main purpose of the account is to enable you to accept electronic payments, so providers require that you have a legitimate business (or non-profit) and a business bank account to receive the funds. When comparing merchant account providers, it’s essential to understand how monthly costs, processing fees, and contract terms affect your bottom line. The right provider will give you access to secure payment gateways, multiple payment options, and seamless global payments, allowing your customers to pay in the way that suits them best.
Importantly, the process of opening a merchant account is similar for both low-risk and high-risk companies – high-risk industries may need to provide additional documentation, but they are not excluded from getting merchant accounts. Specialized merchant account providers cater to these businesses, offering tailored payment options and competitive processing fees to balance risk while still enabling smooth credit card payments and worldwide transactions.
If your company is in a high-risk sector, you may want to read more about specialized merchant accounts for high-risk companies. These accounts often come with transparent pricing, clearly outlined monthly costs, and dedicated payment gateways that make it easier to manage both local and global payments effectively.
What do you need to open a merchant account?
While specific requirements vary by provider, you will typically need the following:
Business bank account
You should have an existing business checking account where your merchant account will settle funds (and often a private/personal account as well). This is essential for smooth payment processing and for linking your merchant services to the proper financial channels.
Registered business status
Proof of your company’s legal registration or your status as a sole proprietor/freelancer (e.g., business license or registration documents). Most small businesses will find this step straightforward, as long as they keep official records up to date.
E-commerce or point-of-sale setup
If you run an online business, you’ll need a functional website/domain for your store and proof that you own it (such as domain verification). This ensures you can accept online payment methods, provide customers with secure merchant services, and accept credit cards through your checkout. Retail businesses should have a point-of-sale system or plan in place to handle both in-store and digital sales.
Company documentation
This may include your Certificate of Incorporation and Articles of Association, information on the company’s ownership and directors, and possibly a business plan for new companies. Providers may also ask about expected sales volumes, as this directly relates to transaction fees and monthly fees that apply to your account.
Processing history (if available)
If you have accepted payments before, providers might ask for past processing statements or data on volumes and chargebacks. This helps them evaluate your business and offer you the lowest payment processing fees possible. A solid history of successful payment processing can make approval faster and potentially reduce costs.
Having these documents and information prepared will smooth the account opening process. Some providers – especially traditional acquiring banks – might have more extensive checks, while online PSPs can often onboard you with just digital copies of documents and quicker compliance checks. Modern providers also simplify setup for small businesses, making it easier to start taking online payment methods and ensuring all transaction fees and monthly fees are transparent from the start.
How to choose the best merchant service provider
Not all merchant service providers are the same. When comparing providers to find the best fit for your business, consider the following factors:
Transaction fees and pricing
Review the provider’s fees for processing transactions. Some offer flat-rate pricing (e.g. a fixed percentage + a fixed fee per transaction) while others use interchange-plus pricing (the interchange fee charged by card networks, plus a markup).
Flat rates (often around 1.5%–3% per transaction, plus ~$0.20–$0.30) are predictable, whereas interchange-plus can be cheaper for higher volumes but more complex. Also check for monthly fees, setup fees, chargeback fees, or early termination fees. The goal is to find competitive rates that match your business size and model. Keep in mind that high-risk businesses might face higher fees or rolling reserves due to their risk profile.
Supported payment methods
Ensure the provider supports all the ways your customers want to pay. Beyond major credit and debit cards, look for support of alternative payment methods – such as digital wallets (Apple Pay, Google Pay), PayPal, bank transfers, buy-now-pay-later options, and local payment methods popular in your target markets. Offering diverse payment options can help increase sales.
Settlement speed
Consider how quickly the provider deposits funds from sales into your business account. Some providers offer next-day or same-day settlements (sometimes for an extra fee), while others have standard funding in 2–3 business days. Faster settlement improves cash flow for small businesses. Also check if they hold a rolling reserve or have payout delays, especially for high-risk accounts.
Security and compliance
Security is paramount when handling payment data. The best providers are PCI DSS compliant (meeting the Payment Card Industry Data Security Standard) to protect cardholder data. They should also offer fraud detection and prevention tools (e.g. fraud scoring, AVS checks, 3D Secure) to minimize chargebacks. Compliance with regulations (like GDPR for customer data, or PSD2 in Europe) and having strong anti-fraud measures will protect your business and customers. For example, providers like Stripe and Genome maintain PCI DSS Level 1 compliance and include built-in fraud prevention systems.
Integration and ease of use
Look at how easily the provider’s system integrates with your sales channels. Do they offer plugins or APIs for popular e-commerce platforms (Shopify, WooCommerce, Magento, etc.)? Is there developer documentation for custom websites? A good provider should fit into your existing website or point-of-sale with minimal hassle. Also consider the user-friendliness of their dashboard or app – you’ll want a clear interface to track payments and manage your account.
Customer support
Reliable customer support can be a lifesaver if you encounter payment issues. Check if the provider offers 24/7 support and through what channels (phone, email, live chat). Prompt, knowledgeable support is especially crucial for small businesses that may not have in-house payments experts. Technical support during integration and a dedicated business account manager are bonuses that indicate strong service.
Scalability
The best merchant service provider is one that can grow with your business. Think about your future needs: can the provider handle increases in transaction volume or expansion to new markets? Some providers offer advanced features like multi-currency processing, support for multiple merchant accounts under one business, or enterprise plans as you scale. Ensure there are no tight limits on transaction volumes or monthly maximums that could hinder your growth.
Reputation and reliability
Finally, research the provider’s reputation. How long have they been in business and who are their typical clients? Read reviews or case studies to see if other businesses (especially in your industry) are satisfied. A reputable provider will have a proven track record of high uptime, secure operations, and fair dealings (e.g. transparent fee structure with no hidden charges). Going with a well-regarded company can give peace of mind that your payments will be handled smoothly.
By weighing all these factors – fees, payment options, speed, security, integration, support, scalability, and reputation – you can identify the best merchant service provider for your specific needs. It often helps to shortlist a few providers and compare their offerings side by side.
Why Genome can become your next merchant service provider
Genome has quickly emerged as a leading financial institution in Lithuania by offering a combination of advanced features, security, and convenience – particularly appealing for small and medium businesses that operate internationally. Here are some key reasons Genome will be among the best merchant service providers in 2025, once our merchant services are launched:
All-in-one financial ecosystem
Genome provides a full payments ecosystem. When you sign up, you get a business wallet with dedicated IBAN accounts and the ability to open multiple multi-currency accounts in USD, GBP, EUR, PLN, CHF, JPY, CAD, CZK, HUF, SEK, AUD, and DKK. Your merchant account, once launched, will be seamlessly connected to your Genome business account for easy fund transfers.
This means you can collect customer payments in your merchant account and then move the funds to your business account or convert currencies as needed, all on one platform. Few providers offer this level of integration between merchant accounts and online banking services.
Fast onboarding and easy integration
Getting started with Genome is fast and fully online. The onboarding process is straightforward, with digital submission of documents and quick compliance checks.
Access your business services online at any time via our web platform or the Genome app. Manage transfers, cards, accounts, payouts, and more!
Security and compliance
Genome takes security seriously. It is fully PCI DSS compliant, which ensures that data is handled with the highest security standards. Moreover, we are ISO 27001 and 27701 certified.
As a regulated Electronic Money Institution supervised by the Bank of Lithuania, Genome adheres to strict compliance and safety protocols.
Businesses can trust that their transactions and funds are secure. In addition, business accounts get a personal account manager, which means if any issue arises, you have a direct point of contact to help resolve it quickly. This level of support and personal attention enhances security and peace of mind for merchants.
Competitive fees and transparent pricing
Genome offers a clear and competitive fee structure. There are different plans for low-risk and high-risk clients, but in general, the transaction fees and account fees are transparent with no hidden charges.
Additional features
Genome provides many extra features that add value for merchants. It supports both SEPA transfers and SWIFT transfers for moving funds, allowing businesses to send or receive international payments easily through their Genome accounts (great for paying suppliers or transferring revenues).
The platform also includes tools for secure currency exchange, so you can convert funds between USD, GBP, EUR, PLN, CHF, JPY, CAD, CZK, HUF, SEK, AUD, and DKK right in your account at competitive rates. Genome’s dashboard offers comprehensive analytics – you can access real-time reports on your sales, track your transaction history, and even set up custom reports to get insights into your business performance.
All of this is accessible in one online dashboard or via Genome’s mobile app, which makes managing your finances convenient. It’s clear that Genome is built as a one-stop solution for modern businesses that need both banking and payment processing in one place.
How to switch merchant service providers
Are you considering switching to a new merchant service provider? Whether you’re unhappy with your current provider’s fees or services, or you’ve outgrown their capabilities, switching can seem daunting. However, by taking a structured approach, you can change merchant providers with minimal disruption to your business. Here’s a step-by-step guide:
Assess your current provider
Start by evaluating why you want to switch. Are you experiencing excessive fees, frequent technical issues, slow deposits, or poor support? Identify the pain points with your current merchant account provider. Also, review your contract for any termination clauses or notice periods (so you know how to exit without unnecessary fees). This assessment will help you prioritize what you need from a new provider.
Compare alternative providers
Research and create a shortlist of new providers that might better serve your needs. Use the comparison factors we discussed earlier – look at transaction pricing, supported payment methods, ease of integration, and so on. Make sure to choose a provider that excels in the areas where your current one is lacking.
Ensure data and accounts are well-prepared
Before making the move, get your business information and data in order. Ensure you have copies of all necessary documents (business license, identification, bank statements, etc.) ready to apply for a new merchant account. Also, consider any customer data or recurring payment info you have with your current provider – you may need to migrate this. For example, if you store customer card tokens for subscriptions, ask the new provider if they can help transfer those tokens securely. It’s crucial to maintain continuity for recurring billing or saved customer payment methods during the switch.
Open a new merchant account
Apply and get approved for your new merchant account before shutting down the old one. This overlap is important to avoid downtime. Many modern providers have online application processes – for example, it’s straightforward to open a business account with Genome and then apply for a Genome merchant account entirely online – we remind you that merchant features will be available in exclusive beta from September 15, 2025. During the application, be honest about your processing volumes and business type to ensure you get an account suited to your needs (especially if you’re a high-risk business switching to a specialized provider). Once approved, set up your new payment gateway or processing tools in a test mode.
Integrate and test the new provider
Integrate the new provider’s payment system into your website or POS and run tests. For an online store, that means installing the provider’s plugin or API and doing test transactions to confirm everything works (payments go through, confirmation emails are sent, etc.). Ensure all payment methods (cards, wallets, etc.) are functioning as expected. If you use alternative payment methods for merchants, double-check those as well. During this phase, you might run both your old and new systems in parallel – for example, initially routing a small percentage of transactions through the new provider to monitor performance.
Inform customers (if necessary)
In most cases, switching the backend processor is invisible to customers – they can still pay the same way. However, if the change will affect them (say, you are switching from one payment portal to another where returning customers might need to re-enter details, or if you are changing the user experience of checkout), it’s good to inform customers ahead of time. This can be as simple as a notice on your site like “We’ve upgraded our payment system for a smoother checkout!”
Migrate recurring payments
If you have recurring subscriptions or billing agreements on the old system, coordinate the migration. Some providers offer services to securely transfer subscription data. If not, you may need customers to re-subscribe under the new system (which you can incentivize or clearly communicate). This step is crucial to avoid losing subscription revenue.
Shut down the old account
Once the new provider is fully up and running and all transactions are flowing through it, you can close your old merchant account. Make sure to withdraw any remaining funds from the old account to your bank. Also, confirm with the old provider that all contracts are terminated (get confirmation in writing) and that no further fees will accrue. Finally, update any bookkeeping or records to reflect the new processor.
By following these steps, you can switch merchant service providers with minimal fuss. For example, the process can look like this: you open a merchant account and business IBAN account (if you don’t have one already), integrate the provider’s gateway on your site (perhaps using their plugin for your shopping cart), test it, then retire your old payment system once your new merchant account is live. Throughout the process, maintain close contact with both the new and old providers – both will have seen many migrations and can often assist in making the transition smooth. Switching may take a bit of effort, but it can lead to better rates, features, and service that benefit your business in the long run.
FAQ
Which merchant account is the best?
There is no single “best” merchant account for every business – the ideal choice depends on your specific needs. The best merchant service provider for a small online store might differ from that for a large retail chain or a high-risk business. You should consider factors like fees, supported payment methods, and service quality.
For example, Stripe and Square are often cited among the best for small to mid-sized businesses due to their ease of use and reasonable fees, while Adyen or specialized providers might be best for enterprise or global operations.
Ultimately, the best merchant account is one that fits your transaction volume, budget, and feature requirements. We recommend comparing a few top providers (as we’ve done in the table above) and choosing the one that aligns with your business model.
How do I choose a merchant account?
Choosing a merchant account involves evaluating both your business needs and the offerings of various providers. Here’s a quick approach:
First, outline your needs. Determine your average monthly sales, whether you sell online, in-person, or both, which countries you need to accept payments from, and if you have any special requirements (e.g., subscription billing, high-risk industry support).
Next, compare providers using key criteria – fees (transaction and monthly fees), payment types supported, contract terms, and integrations. For instance, if you need to accept payments on a website with mostly European customers, you might look for a provider with SEPA Direct Debit support and low currency conversion fees. Read reviews and get referrals if possible (see what similar businesses use).
Finally, contact the providers on your shortlist – many will provide a rate quote or even tailor a plan if you have significant volume. Don’t be afraid to ask questions about how their system works and what customer support is like. By doing this homework, you’ll be able to choose a merchant account provider that offers the best value and functionality for your situation. (For more detailed factors to consider, see the “How to Choose” section above.)
Can anyone get a merchant account?
Basically, yes – anyone with a legitimate business can get a merchant account. You don’t have to be a big corporation; small businesses, startups, freelancers, and non-profits can all qualify.
The main requirements are that you have a registered business or sole proprietorship and a business bank account to settle funds into. Even businesses that operate from home or entirely online can get merchant accounts.
However, certain factors will influence which provider is willing to work with you. For example, if your business is classified as high-risk (due to industry type, higher chargeback rates, or your personal credit history), some mainstream providers like traditional banks might decline your application – but there are many providers (like PaymentCloud, Durango, etc.) that specialize in high-risk merchant accounts.
Geographic location can also matter: you’ll need to choose a provider that supports merchants in your country. In summary, nearly anyone can get a merchant account as long as they have the proper paperwork and choose an appropriate provider. It might just require finding the right match (for instance, a high-risk friendly provider if you’ve been turned down elsewhere).
How are merchant service fees calculated?
Merchant service fees (the fees you pay per transaction) are usually calculated either as a flat rate or on an interchange-plus basis. With a flat-rate plan, you pay a fixed percentage of the transaction value (and often a fixed few cents per transaction) regardless of card type.
For example, a provider might charge 2.9% + $0.30 for every credit card transaction. This is easy to understand – if you process a $100 sale, you’d pay about $3.20 in fees. Flat rates typically range from about 1.5% up to 3.5% of the transaction, depending on the provider and whether the card is present or not. With interchange-plus pricing, your fee is the actual interchange fee (set by Visa, MasterCard, etc., which varies by card type and region) plus a fixed markup by the provider. For instance, if interchange on a certain card transaction is 1.8% + $0.10, a provider might add a 0.5% + $0.10 markup, making your total fee 2.3% + $0.20. This model is more transparent in showing what the card networks charge versus what the provider earns.
It can be cheaper for businesses with larger volumes or many debit card transactions (which have lower interchange). In addition to per-transaction fees, merchant service providers may have other fees: monthly account fees, gateway fees, chargeback fees (often around $15–$25 per incident), and, in some cases, setup fees or early termination fees. Always review a provider’s fee schedule.
Many modern providers (Stripe, Square, etc.) have no monthly fee and no cancellation fee, charging only per transaction – whereas traditional merchant accounts might have a monthly minimum fee or statement fees.
To sum up, merchant fees are usually a percentage + fixed amount on each sale, and they can vary based on the pricing model and the specifics of the transaction (card type, domestic vs. international, etc.). It’s wise to calculate the effective rate you’d be paying with each provider by using your own sales data before deciding.
