Simplifying Merchant Account Approval: Understanding Bank Letters and Voided Checks
Meet the Author
Tom Coughlin, PhD is the owner and founder of The Merchant Way. He’s an engineer by training raised in the garden state, New Jersey. With his uncles owning businesses in Long Island, he grew up hearing the challenges small business owners face over family holiday dinners and barbecues.
In 2019, he learned that some credit card processors don’t do things right. They charge businesses high fees and crazy bogus line items. Tom set out to do things different and give better service with more savings while being a company that could be counted on.
Opening a Merchant Account Requires a Bank Letter or Voided Check
A bank letter plays a crucial role in the smooth operation of your business by providing essential information about your official bank account. Without a dedicated business checking account, you cannot conduct transactions effectively. To open and maintain a merchant account, which is necessary for processing batch deposits, you will need to furnish a bank letter or a voided check to the merchant services provider for approval. While a voided check may incur a small fee, many business owners opt for a bank letter as a more cost-effective solution.
What's Included in a Bank Letter?
A bank letter primarily consists of written confirmation from a bank representative, stating that your business has an operating account with their institution. The letter usually begins with the following verbiage:
"To whom it may concern,
The business (your business) maintains an operating bank account with "our bank" (the specific bank)."
In addition to verifying the existence of your business account, the bank letter includes the following information, which is essential for the proper functioning of a merchant account:
Bank letterhead
Account number
Routing number
Business name
Any restrictions or filters on the account that might impact the approval of your merchant account.
How to Request/Obtain a Bank Letter
There are several methods to request or obtain a bank letter:
In-person: The quickest way is to visit your bank in-person and request the letter. This way, you can ensure all the necessary information is included and make any changes if required.
By phone: You can call your bank's support line and request the bank letter. Many banks offer the convenience of emailing the bank letter in PDF format, which can then be forwarded to your merchant services provider.
By email: Depending on your bank, you may be able to request a bank letter via email. However, it is advisable to opt for a phone call or in-person visit to obtain a verbal acknowledgment of your request.
For your convenience, here are the contact details of popular banks in the USA:
Wells Fargo: 1 (800) 869-3557
Chase Bank: 1 (800) 432-3117
Bank of America: 1 (800) 432-1000
Citibank: 1 (800) 374-9700
BMO Harris: 1 (888) 340-2265
PNC Financial Services: 1 (888) 762-2265
U.S. Bank: 1 (800) 872-2657
Capital One: 1 (877) 383-4802
Bank Letter Example
While the format of a bank letter may vary from bank to bank, all must include the components mentioned earlier. Below is an example of a bank letter with the necessary details (date, bank name, account name, account number, routing number).
Submitting a Bank Letter for Merchant Account Approval
Once you receive your bank letter, you must submit it to your assigned representative to initiate the approval process for your merchant account. With the bank letter on file, the merchant services provider should have all the required information. However, there may be instances where additional information is needed.
An Alternative: Voided Check
Instead of a bank letter, you can also submit a voided check if your checkbook is tied to your business account. Simply take a blank check and write 'VOID' across the front. Then, send a picture of the marked check to the merchant services provider. The voided check should display your business name, account number, and routing number.
To expedite the approval process, you can directly contact the provider to ensure that all the necessary information is in order. Their business specialists will be ready to assist you with your payments and marketing needs.
If you don't have a merchant account with them yet, you can open one through their online portal. The sign-up process is free and takes just a few minutes.
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