Card Acquiring for a New Business in the EU: Getting Your First Merchant Account

You have just incorporated your company in the EU. The website is live, the product or service is ready, and clients are asking how to pay. Then you try to get a merchant account and discover that accepting card payments in Europe as a brand new business is surprisingly difficult. Acquirers ask for processing history you don't have. Banks want six months of statements. Some PSPs decline without explanation. But there is a way - keep reading.

What Card Acquiring Actually Means

When a customer pays your business with a Visa or Mastercard, someone needs to sit on the other side of that transaction and accept the funds on your behalf, verify the payment against the card network, and settle the money into your business account.

That someone is your acquiring bank or payment service provider (PSP).

The acquiring relationship is what makes card acceptance possible. Without an acquirer, you simply cannot accept card payments online.

In the EU, acquiring services are regulated under PSD2 (Payment Services Directive, which means any entity providing acquiring services must be authorised as a Payment Service Provider (PSP) by a national competent authority within the EU. This regulatory framework applies to the acquirer, not directly to you as the merchant, but it shapes exactly what documentation and compliance standards your acquirer will require from you before onboarding.

Why New Businesses Find This Hard?

Acquirers take on financial and reputational risk every time they onboard a merchant. If your customer disputes a transaction, the acquirer is initially on the hook. If you disappear with funds, the acquirer faces losses. This is why underwriting, the process of evaluating whether to take you on as a merchant, is thorough and sometimes painful for new businesses.

The specific challenges new EU businesses face during acquiring onboarding come down to four things:

No processing history. Most risk models are calibrated on historical transaction data such as chargeback rates, refund ratios, average ticket sizes, monthly volumes. A brand new business has none of this. To an underwriter, no history looks the same as unknown risk, which triggers heightened scrutiny.

No financial track record. Acquirers want to see that your business is financially stable enough to absorb chargebacks and refunds without going under. Newly incorporated companies with no audited accounts or bank statements are harder to assess.

Business model uncertainty. A new company's website, terms, and product offering are often still being refined. Acquirers look for clear, professional merchant websites with transparent pricing, refund policies, and contact information. Incomplete or ambiguous websites are a common reason for rejection.

Industry classification. Visa and Mastercard assign every merchant a Merchant Category Code (MCC) that classifies the type of business. Certain MCCs carry higher risk ratings, for example online gaming, forex, travel, subscriptions, digital goods, nutraceuticals, and crypto all fall into this category. New businesses in these sectors face a significantly harder onboarding path than, say, a new restaurant or retail shop.

The Two Types of Acquiring Relationships

Before applying anywhere, it helps to understand the two models you will encounter:

Aggregated merchant account (PSP model): This is where providers like Stripe, and PayPal operate. Your business shares a master merchant account with thousands of other businesses. Onboarding is fast and requires minimal documentation. The trade off is that these platforms have automated risk systems that can freeze or terminate accounts with little notice, and they are generally not suitable for higher-risk business types or high transaction volumes. For a new low-risk EU business processing under €50,000/month, this is often the right starting point.

Dedicated merchant account (direct acquiring): Here you have your own unique merchant ID directly with an acquiring bank or licensed PSP. Onboarding is slower and more document intensive, but you get individual pricing, more stability, dedicated account management, and the ability to handle higher volumes and more complex business models. This is the right model once your business is growing, or if your industry is classified as medium or high risk from day one. If you would like to get an up to date list of EU based PSPs with direct acquiring solution, fill out our contact form and we will send it to you by email.

What You Need to Get Approved: The Full Document Checklist

Regardless of which provider you approach, expect to provide the following. Having everything prepared before applying dramatically improves your approval rate and timeline.

Company documents: Certificate of incorporation, memorandum and articles of association, proof of registered business address, and your VAT number. Most EU acquirers require the merchant to be a legal entity incorporated in an EU or EEA member state. If you are incorporated outside the EU, you may need to establish a European subsidiary or work with a provider that explicitly accepts non-EU entities.

Identity and ownership: Government-issued photo ID (passport) and proof of residential address for all directors and beneficial owners holding 25% or more of the company. Some providers also require a selfie or live video verification.

Business description A clear description of what you sell, to whom, and how. This should include your business model (one-time payments, subscriptions, marketplace), the countries where your customers are located, your expected monthly transaction volume, and your average transaction value. Be specific!

Website compliance: Your website must be live and fully compliant before most acquirers will approve you. This means having a clear product or service description, transparent pricing, a privacy policy (GDPR-compliant), terms and conditions, a refund/cancellation policy, and functioning contact details. For e-commerce businesses, checkout pages must display accepted card brands and supported currencies.

Banking information: The bank account details where you want settlement funds to land. This must be a business account in your company's name. If you need help opening a bank account for your company for PSP settlement collections - get in touch and we will point you to a right direction.

Processing history or business plan: If you have prior card processing history (even from a previous business or a pilot period via Stripe), provide it. If you are a genuine startup with zero history, a well structured business plan showing projected volumes, customer acquisition strategy, and financial forecasts significantly strengthens your application.

Industry specific licences: If your business operates in a regulated sector (like financial services, gaming, pharmaceuticals, travel, crypto), you must provide the relevant licence or regulatory authorisation. Operating in a regulated sector without the correct licence is an automatic decline from any reputable acquirer.

Low-Risk vs. High-Risk: How It Affects Your Options?

The EU acquiring market is broadly split between providers that work with standard (low-risk) merchants and those that specialise in higher-risk business types.

Low-risk businesses: e-commerce retail, SaaS, professional services, digital downloads, food and beverage, health and beauty. These have access to the widest range of providers. Approval typically takes 1 to 5 business days.

Medium to high-risk businesses: forex/CFD platforms, online gaming and gambling, cryptocurrency exchanges, adult content, travel agencies, nutraceuticals, and subscription based models with free trial periods. These face a much narrower pool of willing acquirers. The payments industry categorises certain business verticals as high risk due to legal complexity, regulatory scrutiny, or reputational sensitivity.

The Role of SCA and PCI DSS for New Merchants

Two compliance frameworks matter immediately for any new EU merchant accepting card payments.

Strong Customer Authentication (SCA): is required under PSD2 for online card transactions in the EU. It mandates two-factor authentication for most card payments. In practice, this means your payment flow must support 3DS2 (3D Secure 2) which is the technical standard that handles SCA. Every major PSP in the EU handles this automatically on their hosted checkout pages, so if you are using Stripe, for example, you are already compliant. If you are building a custom payment integration, you need to implement 3DS2 explicitly.

PCI DSS (Payment Card Industry Data Security Standard): applies to any business that touches cardholder data. The good news for most new businesses is that if you use a hosted checkout or redirect payment page from your PSP, the PSP handles PCI compliance and your own obligation is minimal. Only if you are handling raw card data directly (which most new businesses should not be doing) does PCI compliance become a significant technical undertaking.

Common Reasons New EU Businesses Get Declined

Understanding why applications fail is as important as knowing how to apply.

An incomplete or non-compliant website is the single most common reason for rejection. Missing refund policies, no terms and conditions, or a website that is "under construction" are immediate red flags.

Inconsistency between your application and your website is also heavily penalised. If you describe your business as a SaaS tool but your website also mentions trading signals or investment advice, the underwriter will flag the discrepancy and likely decline.

Applying to the wrong provider is extremely common. Applying to Stripe, for example, with a forex brokerage or online casino will result in immediate rejection. Match your business type to a provider that explicitly services your sector.

Incomplete beneficial ownership documentation is a growing issue as EU AML rules tighten. If your ownership structure involves holding companies, trusts, or nominee shareholders, you need to document the full chain to the ultimate beneficial owner before applying.

Finally, unrealistic volume projections create problems at both ends. Projecting €5 million per month as a brand new startup with no processing history triggers underwriting concern. Projecting €5,000/month when you actually plan to process €500,000 creates compliance issues later. Be accurate and realistic.

Quick-Start Action Plan for New EU Merchants

Before submitting any application, work through this checklist:

• Company fully incorporated in an EU/EEA member state with registered address confirmed.

• Business bank account open and active (even with zero balance).

• Website live with terms, privacy policy, refund policy, and contact page all complete.

• Beneficial ownership structure documented down to the ultimate individual owners.

• Relevant industry licence obtained (if operating in a regulated sector).

• Business description written clearly of what you sell, to whom, expected volumes and ticket sizes.

• Identified the right provider tier for your risk profile (aggregated PSP vs. dedicated merchant account).

• 3DS2 compatibility confirmed with your development team if building a custom integration.

  
  

Then approach one provider at a time. Multiple simultaneous applications to different acquirers can flag negatively on underwriting databases while sequential applications give you cleaner outcomes and better feedback if you are declined.

Getting card acquiring right from the start sets the foundation for everything that follows after. It is worth investing the time upfront to match your business to the right provider rather than burning weeks on applications to the wrong ones.

Epico Finance helps regulated businesses and financial institutions establish the right payment infrastructure from day one. Get in touch if you need guidance on selecting the right acquiring partner for your EU business.