Questioning Man

A common question among customers looking to switch over to credit card processing with IntraFirst involves the requirement for a social security number and other identifying information (such as a copy of your driver's license) when applying for a merchant account. Unfortunately, the need for a social security number is a Federal requirement when opening a merchant account, which is a powerful financial instrument.

Under Section 326 of the USA PATRIOT Act, rules come into play for the identification of a business owner. Merchant accounts, through their very nature, are used to send and receive money through a network of financial institutions. The international nature of debit and credit cards makes it possible to move money from one place to another quickly. Therefore, merchant accounts fall under the same restrictions and “know your customer” reporting requirements as bank accounts. Since merchant services involve parties who may not ever have a face-to-face relationship, a higher level of identification is the order of the day.

Patriot Act
Drivers Licenses

While very few business owners would even consider using their credit card terminal to launder money or finance illicit activities, the law recognizes the potential for such action. On our end, there is a legal need to verify you as the owner of the company, who is authorizing the creation of a new merchant account. The upshot of this requirement is that it helps prevent others from opening a merchant account under your business name without your knowledge. This reduces the potential for fraud, embezzlement, and huge tax problems.

Because Federal Law mandates the need for a federal identification number in order to open a merchant account, any processor and its associated banking network must have this information to complete an application. Unlike a normal bank account (which also requires social security numbers) a merchant account is tied to a series of financial institutions, all the way up to Visa/MasterCard. Every account application has to be vetted by acquiring banks and underwriters, which are bound by various federal rules. Therefore, if a payment processor (like IntraFirst, or small bank) neglected to gather this information, the application would be automatically rejected upstream.

No Fraud
Social Security Card

Since the Patriot Act was passed in October 2001, there has been controversy about a number of its provisions, whether they involved the use of social security numbers or the surveillance of US citizens. As a US-based company, operating in the United States, we have no choice but to follow these laws and regulations.

Therefore, while it may indeed be an imposition to use a social security number (or EIN for some corporations) on your merchant account application, we must still ask for it in order to include your company in our low rate, low risk portfolio.