Qualifying for Merchant Accounts

This seems to be a huge shock to many business owners who are declined from a merchant service provider. Before giving you a merchant account, a merchant services provider will want to make sure that you are a legitimate business that will not leave them liable for fraudulent charges.

Even some of the largest most reputable companies have left merchant account processors on the hook for 1000’s to millions of dollars over the years and they are going to do everything they can to prevent this from happening to them again.

They will usually start with just a basic credit check on all the officers listed on the applications and theory is this: “If you run your personal clean, then you will run your business clean.” If your personal credit is poor, you may find that merchant account providers will decline your application.

If a Financial Service Provider denies you then you most likely will not even get the debit option, however, through the "right" ISO organization you will still be able to process Debit even if you are declined from the ability to accept credit cards.

What the credit card processing companies are trying to determine about your business is whether your company is likely to have a high incidence of chargebacks.

- Merchant Account Providers consider physical/tangible products to be safer than services.

- Goods that are exchange at the point-of-sale are viewed as being less risky.

- Lower ticket priced transactions are viewed as being less risky. ($100 and under)

- High ticket priced transactions are viewed as being high risk ($1000 +)

- Card present transactions that allow you to swipe the credit card and obtain a signature in person are considered to be more secure transactions then card not present transactions that take place by phone, mail, or the internet.

As scary as this may seem, do not let it stop you from applying for merchant accounts, 100's of new businesses are accepted every day. We can not stress enough, that finding a good merchant account broker will help you fill-out your application correctly to assist in making qualifying easier and less painful experience.

Read Part 4: Credit Card Payment Processing Pricing