How long does it take to get approved for a merchant account?

Typically it takes about 3-5 business days for a merchant service provider to approve or decline a merchant account application. For the most part this is true, but a number of different factors have an affect on how long it takes to get approved for a merchant account. The personal credit worthiness of the business owner, the type of business, the monthly processing volume being requested and the season are the most influential factors that determine how long it will take to approve a merchant account.

Personal Credit - The most important single factor a processing bank considers when determining whether or not to issue a business a merchant account is the personal credit standing of the business owner. The only time a processing bank would not consider the personal credit of the business owner is if the business is a publicly traded corporation listed on the exchange. Personal credit worthiness will not only determine the length of time that is takes a processing bank to approve a merchant account, it is likely to determine whether they approve the merchant account at all.

A strong credit standing will speed up the merchant account approval process whereas weak credit history will slow the approval process and may cause the merchant account application to be declined.

Business Type - The type of business or the way a business conducts itself carries different associated risks to processing banks. There are a number of different factors that can make a business fall into a high risk category where the business would need to obtain what is referred to as a high risk merchant account. You can read more about high risk merchant accounts here. If a business is considered high risk the processing bank will scrutinize the application more closely and the merchant account approval process will take a little longer. It is important to note that individual processing banks use different criteria to determine if a business is high risk. The same business may be considered high risk by one bank and moderate to low risk by another. If you are having trouble getting a merchant account approved in a timely fashion for your business you may want to try applying through another provider.

Monthly Processing Volume - When applying for a merchant account you will have to specify how much you expect to process each month in dollar volume of credit card sales. The higher your processing volume, the longer it may take a processing bank to approve the merchant account. Declaring the correct processing volume for your business is very important and you should never declare a lower processing volume than what you actually expect it to be just so that you can get approved for a merchant account quickly.

Season - The season in which you apply for a merchant account will have an affect of how long it takes to approve the merchant account application. A merchant account application submitted just before the holidays will take longer for a processing bank to approve than an application submitted during a slower time of year due to the volume of business that a processing bank must deal with.

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Instant Merchant Account Approval / 24-Hour Merchant Account Approval
If you've been researching merchant accounts you have probably seen a few merchant service providers advertising instant approvals or approvals in 24-hours or less. This is strictly a marketing tactic that the provider has no way of guaranteeing. In fact, MasterCard has published literature specifically denouncing this practice. It is certainly possible for a merchant account to be approve almost instantly or well within a 24-hour period but it is definitely not the norm and it happens far more seldom than these providers make it sound.