Most small business owners find themselves in a Catch 22 situation because on one hand, they need to increase the customer base, but on the other hand, they cannot hire enough employees to service these new customers.

Small business merchant accounts can help the small business owner to over come this dilemma. Small business merchant accounts allow the business owner to accept payments from customers in various modes such as credit cards, checks, and other electronic mediums. Electronic check processing and credit card payment processing are some of the more popular payment methods today. Payment gateways that come with a small business merchant account allow the instant processing of purchases, and this rapid processing allows the merchant to handle many more transactions more quickly.

As the payment process is made simpler and safer, more customers return for repeat purchases, and the business owner does not have to hire any new employees and save time on needless paperwork. The prompt handling of purchases contributes to efficiency in a business, and being able to accept all forms of payment–from personal checks to major credit cards–can increase sales up to 40%, according to studies by the industry. All this results in increased sales volume of the business. Therefore, a small business merchant account can make the difference between survival and failure at the crucial start-up phase of a business.

This method of process payments via small business merchant accounts becomes more important when the small business owner is setting up his business. He does not have enough capital when starting the business to hire more employees to service his clientele but his business success depends upon increased customer base.

Small business merchant accounts offer credit card processing services for a wide variety of business models –online or physically located stores, mail order, telephone order, or mobile business. small merchants can enjoy best possible discount rates with processing services that best meet their needs.

High-risk merchants such as telemarketers, Internet/e-commerce businesses, merchants in the travel and cruise industries, businesses that conduct Internet auctions, and businesses offering membership clubs may face difficulty opening a merchant account.

Just because you have a high-risk business it does not necessitate the fact that you cannot open any merchant account, you would be required to open a high-risk account. The banks and independent organizations that provide merchant account services will evaluate your case on the basis of certain information such as how long you’ve been in business, your credit history, and any previous merchant accounts you’ve held.

In such a scenario, the length of time that your business has been operational would really make the difference. If your business has been operational for long time, that would act as an assurance to the account provider. If you own a business for a long time the provider is aware that you do understand the matrix of running a business and the high risk involved.

The second aspect that the provider would view is your credit report. This is to confirm your capability to repay loans and disclose any information on bad credit such as bankruptcies or liens. The better you credit score better your chances to open the high-risk merchant account.

If you already have another merchant account or if you had previously owned a merchant account, then the way you managed your account would reflect in a positive or negative way on your current application. If you or the provider terminated a merchant account it will show up on the Member Alert to Control High-Risk Merchants file.

The providers would also check on information such as default payments and charge backs on your previous merchant account. If there are too many of these then it could create a negative impact on opening a future account.