EIN for Opening a Merchant or Payment Processing Account

Jan. 25, 2026, 10:41 a.m.
Opening a merchant account or payment processing account (Stripe, PayPal, Square, Authorize.net, etc.) in the U.S. almost always requires an EIN (Employer Identification Number)—especially if you’re operating as a business entity. Below is exactly why it’s required, when it’s optional, and how to get approved faster.
EIN for Opening a Merchant or Payment Processing Account

What Is an EIN and Why Processors Ask for It

An EIN is a federal tax ID issued by the IRS to identify a business. Payment processors use it to:

  • Verify your business identity

  • Comply with KYC (Know Your Customer) and AML regulations

  • Report transactions to the IRS (Form 1099-K)

  • Reduce fraud and chargeback risk

 In short: no EIN = higher risk, and many processors simply won’t approve the account.

Do You Need an EIN to Open a Merchant Account?

 EIN is Required if you are:

  • An LLC (single-member or multi-member)

  • A Corporation (C-Corp or S-Corp)

  • A Partnership

  • A Nonprofit

  • A Foreign-owned U.S. business

  • Planning to process large volumes or recurring payments

 EIN may be Optional if:

  • You are a sole proprietor with no employees

  • The processor allows SSN-based accounts (some do)

 Even when optional, using an EIN is strongly recommended to protect your SSN and increase approval odds.

EIN vs SSN for Payment Processing

Feature EIN SSN
Protects personal identity  Yes  No
Preferred by processors  Yes  Limited
Required for LLCs & corps Yes  No
Better approval rates  Yes  Lower
Needed for business banking  Yes  No

 Processors trust EINs more than SSNs.

Common Payment Processors That Require an EIN

Most major platforms require or strongly prefer an EIN:

  • Stripe

  • PayPal (Business account)

  • Square

  • Authorize.net

  • Adyen

  • Braintree

  • Shopify Payments

  • Worldpay

High-risk processors always require an EIN.

Documents Typically Required Along With an EIN

When applying for a merchant account, expect to provide:

  • EIN confirmation letter (CP 575)

  • Business legal name (must match EIN)

  • Business address & phone number

  • Business bank account (linked to EIN)

  • Articles of Organization / Incorporation (for LLCs & corps)

  • Owner identification (ID or passport)

  • Website or product description

Name mismatches between EIN and bank account are a top cause of denial.

How to Get an EIN (Fast)

 Approval time:

  • Online: Immediately

  • Fax/Mail: 1–4 weeks

EIN for High-Risk Merchant Accounts

If your business is considered high risk (CBD, supplements, travel, digital services, forex, etc.):

  • EIN is mandatory

  • Personal SSN alone will not work

  • Business verification will be more detailed

  • Chargeback history may be reviewed

Common EIN Mistakes That Delay Merchant Approval

 Using an EIN that doesn’t match the business name
 Applying as an LLC but using an SSN
 Using a brand name not registered to the EIN
 No business bank account tied to the EIN
 Incorrect business address or entity type

EIN Checklist for Merchant Account Approval

Before applying, make sure you have:

 EIN issued by IRS
Matching legal business name
 Business bank account
 Active website or sales channel
 Clear product/service description
 Owner ID ready

Final Takeaway

If you’re opening a merchant or payment processing account, an EIN isn’t just helpful—it’s often essential.

Using an EIN improves approval rates, protects your identity, and makes your business look legitimate to processors.

 

 

 

EIN for Opening a Merchant or Payment Processing Account