eBusiness Canada - Resources For Canadian Ecommerce

...continued from page 2 Third party vs. merchant accounts
...continued from page 1 Canadian payment processing

Can Canadians Use American Merchant Account Solutions?

A huge pitfall of new Canadian businesses and merchant accounts relates to US based merchant account solutions. In Canada there is a very small handful of merchant account solutions as there are a very small handful of banks with which to get the merchant accounts from. In the US merchant accounts are a dime a dozen with basically no application process to speak of.

This is completely contrary to Canadian systems, and it should be noted that a Canadian company can not simply apply with a US based payment processor. Although technically possible to set up payment processing with US based platforms, this would generally require a Canadian company to hold a permanent business address in the US and in some cases this alone is not enough – the owner of the company must be a registered US citizen and provide SSN details.

Obviously this is not the first step that new Canadian businesses should take, but still many do. Initially a Canadian searching for a payment processing solution may not be aware of the difference between Canadian and US solutions and may become attracted by the seemingly rock bottom rates and easy approval process for the US accounts.

Conservative Banking Leads To Stable Merchant Accounts

Information on US based merchant accounts is everywhere online and so diligence must be used to locate solutions suitable for Canadian companies. Spending your time and resources on integrating to the wrong software can ruin the efficiency of a start up ebusiness so be sure to understand where your business will start, but also where it will grow to.

Canadian merchant account applications require extensive effort to satisfy where American merchant account solutions have a much more relaxed application and approval process in general.

Since Canadian merchant accounts require more extensive application criteria they tend to be stable being that they are based on a platform of reduced risk by comparison to lenient US application criteria. This combined with the additional time and expense of developing a business entity in the USA as required for US based merchant accounts make Canadian merchant account solutions the obvious choice for processing online transactions for a Canadian company.

You can read more about Canadian internet merchant account solutions on the Canadian eBusiness Blog or by browsing the online business articles on The Canadian eBusiness Article Directory