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REASONS THAT LEAD TO YOUR MERCHANT
ACCOUNT APPLICATION BEING REJECTED
If you thought that you will surely get
a merchant account, then you are very
wrong. Some of the merchant account
providers advertise that they have a 98%
rate of approval or even higher, but
that is because these companies do
something called as a “Pre –
Qualification” process on their
customers before accepting their
application for opening a merchant
account, with them.
Practically, there are several reasons
why your application for the merchant
account can be rejected. If you are the
knowledge of the reasons, before
applying, then you can be more careful
and can be saved from the frustration of
going through the whole process without
gaining anything. Without beating around
the bush, listed below are few of the
reasons for your merchant account
application being rejected by the
processing banks.
-
Poor Credit Report of the owner or
Active Collection Accounts
If your business is not listed on any of
the big stock exchanges, then the credit
history of the chief member or the owner
will have a big impact for the approval
of the merchant account for your
business. If the Owner’s Credit Report
is not good or he has active
collections, then the application for
the merchant account will be rejected.
-
The Type of Business is not
acceptable
Each processing bank has its own
guidelines which decide which business
they will issue the merchant accounts to
and which they will not. Therefore, if
your line of business is listed in the
list of prohibited business types of the
bank, then your application will be
rejected without further consideration.
The prohibited businesses mostly include
adult businesses, companies which
provide warranties for extended periods
and businesses related to debt.
If there is a tax lien that is active
against the business or against the
owner of the business then your
application will be rejected without any
more considerations.
-
Your business type does not support
the average ticket size and the
processing volume
The account providers do not tolerate
any kind of fraud and therefore, there
review the application for the merchant
account very meticulously for any foul
play. If they feel that the average
ticket size and the processing volume
given in your application do not jive
with your line of business, your
application will be rejected
immediately. For example, if the coffee
shop gave $500 as the average ticket
size in their application then the
application would probably be rejected.
There is a list called as “The Member
Alert to Control High Risk File” also
known as MATCH which contains all the
merchants who have cancelled or closed
their merchant accounts due to violation
of the service agreement. Any merchant
who is listed on this list will not get
a merchant account from any of the
providers unless they are removed from
the list. Getting delisted from “MATCH”,
is not an easy task and may also require
assistance from legal experts.
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