Published on June 23rd, 2017 | by William Charles12
What Are Merchant Services (Common Requirement For Business Banking Bonuses)?
A lot of business bank account bonuses require you to activate and use merchant services. My advice has always been to avoid these types of bonuses and readers always want to know why. The best way to explain why I don’t think those bonuses are worth doing is to explain what merchant services are.
Merchant services basically refers to the ability for a business to accept cards (debit & credit) and more recently NFC/RFID payments. If you have a business that requires these services then switching providers might be worth considering for a bonus but if you don’t need these services I don’t think it’s worth the effort involved for the following reasons:
- Merchant services aren’t free. Usually you pay a monthly fee to accept payments and then an additional fee for each payment accepted, the amount you pay will depend on the types of cards used by your customers. Before you get ideas of running up hundreds of thousands in credit card payments to yourself, this is strictly prohibited by all providers and enforced. In addition there is usually a minimum time commitment and heavy early account termination fee.
- You might create a tax liability. If you’re accepting card payments then it’s likely the government will see this as revenue earned and you’ll be required to pay taxes. I’m not a tax professional so please consult one to discuss this with a licensed professional.
I love bank account bonuses, but I try to stick to ones that are easy and anything that has activating merchant services is an easy pass for me. Have you ever signed up for a business bank account that required merchant services? Do you have anything else to add? Let us know in the comments below.