When applying for a merchant account, you will be asked to provide your Social Security Number. Just like applying at a local branch of a bank, the SSN is needed to pull up background information and history.
Some merchants are unaware of the need for a SSN in applying and want to know why such personal information is required. We get it. It’s awesome you’re being cautious. Allow us to answer the question of “Why the heck do you need my SSN to open this account?”
Under government regulations that came into play in 2001, identification of a business owner is a must. Since money is being moved from financial institutions to other institutions, the “know your customer” policy takes effect as it would with a normal bank account.
The risk of laundering money is a risk that falls on the payment processor and bank that approves your merchant account. While we know the majority of you wouldn’t even dream of laundering money, it’s still a potential when passing money through institutions with debit and credit cards.
As a payment processing solution, we don’t have any choice but to follow these laws and regulations imposed by the government. The important takeaway is that you should realize that while the SSN requirement may seem like a lot to ask for, it ultimately protects you as well. These regulations help you avoid the risk and headache of having someone open a merchant account and partake in risky activity under YOUR legal name.
Feel free to thank your provider for going through the steps to make sure they truly know you as a customer.