The road to business is paved with many financial requirements, and one of those, especially in an increasingly online-reliant world, is a merchant account. Usually, applying for and getting a merchant account is a straightforward process, even if isn’t always simple. However, there are some instances where a business may find their application of merchant account being denied by the bank they are applying to. There are a number of reasons for why this occurs. Here are a few:
This doesn’t necessarily mean that what you are doing or what you are selling is illegal. But some high risk credit card processors have a list of industries that they are not interested in providing account coverage for due to the risk their banking partners have deemed as being too high.
There may be ways to negotiate around this, or you may have to consider applying your merchant account with another company that has banking partners less averse to your particular industry.
The TMF Match List is a database managed by MasterCard, and the TMF stands for “Terminated Merchant File.” Put simply this means that either you, or someone in a major position within the company, such as a director or major shareholder, has previously had a merchant file that has been terminated.
All banks have access to this list, so if you or someone else within the company appears on this list, you may need to negotiate with someone in order to find out what is required to get off the list.
Everyone wants to see a business grow, but even growth has certain limits. Banks understand that any business has a certain average for the kind of income and numbers it will pull. If you are applying for a merchant account and your application has expected volumes and/or growth that are far in excess of what businesses in your sector realistically make, this will hurt, not help your application.
Try to keep your numbers optimistic, but realistic.
Honesty is the foundation of any good business relationship, and those relationships can be quickly severed if the honesty if lacking. If a merchant account was granted in good faith, based on your claim to sell certain products at certain prices, and then it’s found you are not selling what was intended at all, or your prices are very different from what you claimed, these are cases of fraud, that are not treated lightly.
Worse yet, if you deal in proscribed substances, such as controlled drugs, or illegal sexual content, this can also be grounds for an account being declined.
A credit card processing system is a good thing to have in any successful business, but you need to make sure your own financial history and your business plans are in good order to secure your merchant account.
Posted in Merchant Account on Feb 16, 2016