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What a U.S. Business Needs to Get a Payment Processor and Why

Every business in the United States—whether a startup, growing brand, or established company—needs a way to accept payments. Customers now expect to pay through credit cards, debit cards, ACH, eChecks, or digital wallets. A payment processor makes that possible by moving money securely from your customer to your bank account.

Table of Contents: —

To get approved by a payment processor, a business has to meet certain requirements. These aren’t just formalities—they help verify legitimacy, reduce risk, and ensure smooth transactions. Here’s a full breakdown of what U.S. businesses need and the purpose behind each requirement.

1. Legally Registered Business: —

Before approval, a payment processor checks whether your business is properly registered.

You typically need:

  1. LLC, Corporation, Sole Proprietorship, or Partnership documents
  2. EIN or SSN for sole proprietor
  3. Business license, if required in your sector or state

These details confirm that your business is operational and follows U.S. regulations.

2. Business Bank Account: —

Processors deposit funds into your business account, so you must provide accurate banking information.

You may need:

  1. Routing and account number
  2. A voided check or bank letter

This ensures smooth payouts and keeps finances separate from personal funds.

3. Business Website or Sales Platform: —

If you sell online, processors review your digital presence to understand your products, pricing, and policies.

They look for:

  1. Product or service descriptions
  2. Pricing and refund terms
  3. Secure checkout pages (HTTPS)
  4. Contact information
  5. Privacy policy and terms of service

If your business operates offline, alternative proof such as invoices, profiles, menus, or catalogs may be needed.

4. Owner and Business Identity Verification: —

Payment processors verify the identity of the responsible party using KYC (Know Your Customer) standards.

They may request:

  1. Driver’s license or passport
  2. EIN or SSN
  3. Business address and contact details

This protects against identity theft and unlawful use of accounts.

5. Business Financial History: —

Processors often evaluate your financial activity to understand expected transaction levels and reliability.

They may ask for:

  1. Three to six months of bank statements
  2. Processing history, if switching providers
  3. Estimated transaction volume and ticket size

This helps determine account limits and identify potential risk.

6. Industry Risk Level: —

Some industries are considered riskier due to higher chargebacks or regulations.

Common Low-Risk Industries:

  1. Retail
  2. Clothing stores
  3. Professional services
  4. Restaurants

Common High-Risk Industries:

  1. CBD and cannabis-related sectors
  2. Travel services
  3. Online coaching
  4. Subscription models
  5. Tech support
  6. Adult content
  7. Firearms and accessories

High-risk merchants may face stricter requirements, reserves, or higher fees.

7. PCI Compliance: —

Any business that accepts card payments must follow PCI DSS (Payment Card Industry Data Security Standard).

Compliance includes:

  1. Using encrypted systems
  2. Avoiding storage of card data
  3. Securing online checkout pages
  4. Completing annual assessments

Many processors support PCI compliance through built-in tools or guidelines.

8. Refund and Chargeback Policies: —

Processors assess how you handle customer disputes and refunds.

You should have:

  1. Clear return and refund policy
  2. Visible terms and conditions
  3. Contact options for support
  4. Delivery and service details

This helps set customer expectations and reduce disputes.

9. Transparent Products and Pricing: —

Processors review what you sell and how you present it.

They expect:

  1. Honest product descriptions
  2. Clear pricing
  3. Legal items only
  4. No hidden billing practices

This helps prevent disputes and account holds.

10. Estimated Processing Volume: —

Payment processors need your projected payment volume to set your account parameters.

They typically ask about:

  1. Monthly processing estimates
  2. Average transaction value
  3. Highest expected ticket size

Accurate data helps prevent delayed payouts or funding holds.

11. Payment Use Case: —

Processors want to know how you plan to accept customer payments.

Common use cases include:

  1. eCommerce platforms
  2. Invoicing and billing
  3. Subscription or membership billing
  4. In-store POS terminals
  5. Mobile or field payments
  6. Virtual terminals
  7. B2B transactions

This helps tailor the tools and setup you receive.

12. Contract and Agreement: —

Before onboarding, you’ll sign a merchant agreement outlining the terms of service.

These agreements cover:

  1. Fees and pricing
  2. Chargeback rules
  3. Reserve terms (if any)
  4. Contract length
  5. Settlement timelines

Understanding terms prevents surprises with fees, frozen funds, or penalties.

Why Businesses Need a Payment Processor: —

Beyond approval requirements, payment processors support your operations in many practical ways.

  • Accept More Payment Methods: You can accept Credit cards, ACH payments, digital wallets, and eChecks, expanding accessibility.
  • Faster Payouts: Funds move directly into your bank account without manual handling.
  • Trust and Customer Confidence: Secure payment options encourage more completed sales.
  • Organized Financial Records: Transactions are automatically tracked for easier bookkeeping and tax management.
  • Fraud Prevention Tools: Processors use monitoring, encryption, and dispute systems to reduce risk.
  • Regulatory Support: They help maintain compliance with KYC, AML, PCI, and tax reporting standards.
  • Better Customer Experience: Faster and smoother checkout leads to higher satisfaction and better retention.

Final Thoughts: —

Every U.S. business that wants to accept non-cash payments needs a payment processor. Approval isn’t just about paperwork—it’s about building a trustworthy, legal, and secure relationship. By preparing the right documentation, being transparent about your business, and understanding the requirements, you can get approved faster and avoid delays.

A well-chosen processor doesn’t only move money—it protects your revenue, supports compliance, and helps your business grow. Once you’re set up, you can focus on what matters most: delivering value to your customers and scaling your business with confidence.

Looking for a Payment Processor?

author avatar
Tisa Stone Senior Content Writer
Tisa Stone is a Senior Content Writer at eCheckplan, specializing in payment processing, fintech, and merchant services.
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