Hello,

I'm new to merchant accounts. I'm currently using Paypal to process payments and donations. However, I've grown wary of hearing all the bad things they've done to people. Freeze accounts, stealing and holding funds, etc. Especially with what happened to Newbin, I've decided to drop them and look elsewhere.

I run a video streaming site, and I receive payments and donations from members for membership and subscription services (I'm not sure if that falls in the High Risk category or not). I do this as a hobby, part-time and on the side. I do everything from home, and I rent dedicated servers to host the streams. It's a one-man thing...

And so, my site is not a registered business. I just have a DBA name... with Paypal, I didn't seem to be needed to have the business registered, even though I hold a Paypal Business account.

Well I can't really call this a business. It's a side thing, and most of the money is used to pay for the dedicated servers, and some extra for the time I work on it.

I really want to drop Paypal (and not have to go with any other third party processor) because of the bad things I've been hearing, and I'm afraid to get my account locked up, and if that happened, I would have to close my sites, and that would mean unhappy users. =/

And I want to add that my site processes about $1K per month, but still less than $1k every month.

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So, what I would like to know is: Can I obtain a Merchant Account without having to have my site registered as a business? Would I need to be?


EDIT: I live in Canada, if that changes anything.

If you are providing video streamed content on a subscription basis, registering your business would actually be the easy part and probably the least of your concerns with respect to obtaining a merchant account.

The expensive part would be the thousands of dollars in registration costs - upfront & ongoing - required by Visa due to your business being a Videotext business defined as a High-Risk business (and classified under the 5967 or similiar SIC code).

In addition, most banks are unwilling to underwrite those kinds of accounts any more, particularly in the U.S. Some Canadian banks may view it differently - I really can't speak on that with great confidence on that since things work a little differently in Canada with respect to bankcard processing.

However, since you are mentioning that this is just a hobby/side business - I think you may be best of just sticking with PayPal if it has been working fine for you... unless you are generating a ton of money and feel it is worth the effort to setup a direct merchant account and go through the costs & hoops associated with that.

Hope that info is helpful and best of luck!

For the amount of sales you process and considering that its a side business/hobby, its probably not going to be worth your while to open a direct account.