Applying for a merchant account seems to be an intimidating process at times. Before the services are granted, an approval process is involved. This includes an application process by the merchant processors that evaluate the merchant and the business information to estimate and minimize the risk. Want to know these risks? Well, it refers to the condition when businesses either go bankrupt or suffer from chargebacks. Let us unveil the 5 most popular reasons behind businesses failing in getting merchant account approval.
Here we go:
- Not so impressive credit card history
Credit history of merchants reveals whether they will have any trouble paying the merchant services providers’ bills. It’s quite obvious for them to reject clients who appear as liability. No matter how many good profit deals you earn, if you have a bad credit history, you will have significantly diminished value.
2. False processing volume and average ticket size
While filling the account application, it is important for the merchants to provide monthly processing volume along with average ticket size to the service providers. If in case, these numbers do not match with the type of business they are involved in, it increases risk of having the application declined.
- Present on the MATCH List
Visa and MasterCard processing banks have a MATCH list that has record of businesses with terminated merchant accounts in the past. As all the acquiring banks and credit card processors have direct access to this list, they can anytime check your presence or absence on it. Any name that is associated with your business or terminated merchant account can be seen on the list.
- High Risk Industry
Now this factor is something that varies from one merchant account provider to another merchant account service provider. Hence, if a business gets denied at one place, they can try their luck at another. Under the category of high-risk comes the industries who experience repetitive fraud or have a greater chance of problems. This reason makes account providers to limit all the businesses belonging to those industries.
- Unacceptable e-commerce industry
There are certain industries that can’t be accepted by the high risk credit card processors. This means that the processor does not have partnership with a bank partner who accepts this type of e-commerce industry. It is important to know that acquiring banks have the right to accept the type of e-commerce industries they find safe. If they find an industry too risky, they may reject it.
So, these are the high-ranked reasons that account for a merchant getting rejected by merchant service providers. If you have any of these reasons, it’s time to take the appropriate action.
You may also read-: 7 Keys To Find The Right Merchant Account Service Providers