Common Reasons Why Small Businesses are Turned Down for Merchant Accounts


Filed under: Credit Card Processing

Tagged with: · ·

When you’re in the market for a merchant account, you might assume that you will automatically be approved by the payment processing company of your choice. So, it can be a letdown to have your application denied.

Sometimes, the denial might be due to a small mistake that was made on the application. Other times, it could be the result of the type of business you are doing. Here are a few things that could impact your ability to get the merchant account that is needed:

Poor Personal Credit History

You will need to sign a personal guarantee on the account, which means that your personal credit history could have an impact on your approval. The credit card processing company wants to know that your account will have sufficient funds and there aren’t any issues with outstanding balances or overdrafts.

High-Risk Business Activities

Certain business industries have high risk. The credit card processing service might be hesitant to sign an agreement if there is a high risk with the transactions that will be moving through. Having a high-risk business doesn’t mean that you can’t find a company that will work with you. But, you need to find the right payment processing service. Also, you can expect to pay higher processing fees on your monthly statements due to the risk factors on the account.

Too Many Chargebacks

Chargebacks are unavoidable, and most businesses experience a chargeback every once in a while, due to fraud or disputes with the cardholder. Occasionally, chargebacks aren’t an issue. But a pattern of high chargeback activity could be a red flag for your company. The payment processor will see this activity as high-risk.

 Your Business Has Been Blacklisted

Did you know that there is a MATCH list, which is essentially a “blacklist” that credit card processors use? This list shares information about businesses with terminated merchant accounts. You can avoid this list by ensuring that balances and fees are paid up with any other merchants that you’ve worked with. Always avoid situations that could cause problems with the relationship that you share with any merchant processing company.

We are happy to assess your situation and help you identify the best way to get the services that match the needs of your company. If you are looking for merchant services, talk to Rick Johnson at National Merchant Services. Call today: 888-891-0811



Leave A Comment or Question