How to Get a Merchant Account in Canada Part 1 by Tawnya Sutherland
So today’s the day! You have decided to phone your local bank in Canada to setup a merchant account to sell your $5.00 homemade candles on the Internet. Hopefully you can be all setup by the end of the evening and candle orders will be filling your email box from around the world by morning.
Getting a Merchant Account at Your Local Bank:
Day 1 You phone the bank, setup an appointment to come in next Wednesday at 3pm to speak to a Bank Manager (hereinafter referred to as BM – acronym will be defined near end of article). The BM tells you to bring in all your business registration papers, identification and samples of your product you will be selling online. Excitedly, you head home to gather all this information.
Day 5 You patiently wait until Wednesday, walk into the bank with all your documentation intact and ready to roll. Dreams of people clicking onto your site and ordering candles galore tonight by midnight.
The BM first asks you if you will be selling to US based customers. You answer, “Of course, I want to make use of the internet and sell globally”. The BM then asks you if you have a US business account with their bank. You reply, “Ummmm, no Sir I do not.” He then goes on to tell you that you must then open up a Canadian/US banking account. To do this you must have an American based business address so you are told to get one and come back when you have that completed. Gung ho as you are, you smile at the BM and head off to follow more orders from him.
Day 6 You think of all the ways you could get a US business from expensively incorporating your company or heck you could just move to your sister’s house the US. After taking in pros/cons of both options, you finally decide on just grabbing a Post Office Box across the border so it looks like you have a business there.
A two-hour drive to the US border and $150 later you have a US business mailing address. You evilly smile thinking how smart you were figuring out this problem.
Day 7 You set up another appointment with your BM who pens you in for next Tuesday. Monday comes along and because the BM is on holidays, his secretary pushes your appointment to Friday.
Day 10 Still no merchant account.
Day 14 Friday comes along and off you go to your appointment with the BM. You meet with him and he asks to see your business plan. You squirm and say innocently, “My business plan? I do not have one.” The BM tells you that without a 10-15 page business plan, their bank will not even consider you for a merchant account. The BM sends you home with business plan forms and other standard bank credit forms which must be filled out to open up a merchant account giving you another appointment in five days to meet with him.
Day 15 You start to prepare your business plan. Paperwork starts to overwhelm you and you grab another coffee to wrangle through it all.
Day 18 It’s midnight, 3 days later, and you are finally done the business plan plus all the bank forms the BM handed you last visit. Satisfied nothing can stop you now, you peacefully fall asleep dreaming of candle orders spamming your email box.
Day 19 At your appointment, the BM looks over all your paperwork and notes how well you did on filling everything in correctly. He stands up and says, “We’ll send this off to the credit bureau to make sure everything checks out and contact you for another appointment to sign your merchant account.” You are thrilled and ask him how long the check takes. The BM replies, “It should be back in about 10 business days.” Discouraged, yet unbeaten, you leave the bank and go home and wait for his call.
Day 30 Finally, after almost a month from initializing your first appointment with the Bank, the BM’s secretary phones and sees if you can make it to the bank today by 2:00pm to find out if your merchant account was approved or not. You stub out your freshly lit cigarette and jump into the shower to clean up, all the time hoping traffic will be minimal since you only have 35 minutes to reach the bank appointment time.
At the bank, on time, you find yourself sitting in the BM’s office with all your merchant account papers on the BM’s desk patiently waiting for his approval.
He greets you with a handshake and congratulates you, telling you that your credit report went through and you may now have a VISA merchant account with their bank. YES, you scream inside!
After the initial thrill wears off, you feel confused since you wanted to accept Mastercard as well as a few other credit cards, not just VISA. You ask the BM about this concern. The BM explains “that each bank in Canada deals with only one major credit card and if you want Mastercard, you will have to go through this same process at the bank up the street that offers Mastercard.”
Again, frustrated yet not beaten, you say “ok.”
The BM sits back down and begins to explain the contract and the conditions therein. The conditions all seem in order for signature until we get to the security clause which states I must put up $42,000 as security for this account since internet merchant accounts are high risk for the bank. “What????? I don’t have that kind of security deposit!”
You storm out of the bank, wondering why you wasted your time and energy this last month with some BM who turns out to be more of a irritating bowel movement (BM acronym finally defined from above) than anything else.
Curiously however, you still wonder how that girl up the street selling Tupperware online got her merchant account?
Does this scene sound too familiar when trying to get a Canadian Merchant account?
Getting a Canadian merchant account is harder than one anticipates. Not to mention …expensive!
About the Author
Tawnya Sutherland, CIMS is a Certified Internet Marketing Specialist providing Virtual Assistant services. Visit her Web site, MediaMage Business Solutions.
Article: Tawnya Sutherland, Copyright © 2003