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ARE YOU ELIGIBLE FOR A MERCHANT ACCOUNT
IN THE US?
A merchant account allows you to accept
credit card payments from your
customers. According to experts this is
an easy way to increase the sales volume
of your business and thereby increase
your profits. In the competitive
business world of today providing a
convenient means for your customer to
pay their bills is compulsory or else
you will be risking of losing them.
However, obtaining a merchant account is
not as easy as it sounds, especially in
the United States.
MasterCard and Visa, which are the major
credit cards in the world and the U.S.,
forbid some companies to establish a US
based account to accept debit card and
credit card payments because of the line
of business the company is in. The
important task of creating a black list
of companies is compulsory for every
acquiring bank, which are members of
MasterCard and Visa networks. Even the
“merchant service providers” should have
a black list. The meaning of this is
that, no merchant bank in the United
States is allowed to do business with
the organisations in the “Black List”.
The largest factor to determine whether
a business should be black listed or not
from setting up a merchant account in
the United States is, its chargeback
potential. It means that the line of
business where there are high
probabilities of charge backs will not
be allowed to obtain a merchant in the
US. The historical data shows that some
industries have unacceptable high levels
of charge backs. Even those businesses
which already have a US based merchant
account cannot relax as the chargeback
level is very closely monitored for each
merchant. If they increase to over one
percent of the monthly transactions, for
3 consecutive months, then the merchant
will have to surrender his merchant
account. Also, the providers of merchant
services get penalised for the high
levels of chargeback by their merchants,
which motivates them to keep strict
checks on the levels. Of course, those
penalties are directly passed on to the
merchants by the merchant account
providers.
Applications of companies involved in
the following businesses will not get
approved for the “US based merchant
accounts”, because historical data shows
that these businesses get a high level
of charge backs:
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Any merchant involved in illegal
activities.
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Adult oriented services or products
through printed material, telephone,
internet and all other media types.
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MO/TO and online pharmacies where
the patient does not visit a
physician in person. He just
consults the doctor over the phone
or the internet, where the
fulfilment of the medication is
performed.
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Re – importation of pharmacy
products from other countries.
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MO/TO and online weapon or firearm
sales, including ammunitions.
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Gambling, raffles and lotteries.
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Escort services
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Occult materials.
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Online gambling.
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Collection agencies that involve in
collecting of the uncollectible debt
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Agencies that help their clients to
repair their credit
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Odds making or sports forecasting
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