POINTS TO CONSIDER BEFORE TERMINATING A HIGH RISK MERCHANT ACCOUNT

 Terminating your credit card merchant account can be done by a simple phone call or an email to your provider, requesting him to terminate your merchant account. For security and safety reasons, most merchant account providers require that you submit some information to authenticate your identity in your request application before they begin to process your termination request. Though, the account termination process is so simple, if you had been careless while signing the fine print during account opening then you will be in for a shock in the form of a large termination fee.

This “Early Termination Fee” can range from fifty dollars to five hundred dollars or more depending on the merchant account provider and the type of account. This fees is applicable only if you want to close the account before a specified period of time that is mentioned in the agreement document. Having to pay a huge fee for terminating your merchant account is very frustrating. But with a little care you can lessen the pain or even get rid of it completely.

The first and the most obvious thing you can do is, to check your agreement document to see if the termination fees are still applicable. Most of the agreements makes the termination fees invalid if the rates of processing are raised before the contract is over. For example, suppose the discount rates increased in the first year, you will not have to pay any termination fee without considering the term of contract.

This loop hole will not be exposed by the account provider or the bank. You should check the agreement to see if it is there. If such a condition does not exist then it is better for you to keep the account open till the expiry of the contract. This calculation is for you to make. You should calculate the difference in cost for keeping the account open till the expiry and the termination fees. If it is positive then keep the account open.

One last thing to remember is: if you are a merchant who is closing this merchant account to open another account due to low fees and rates then the first choice should be to negotiate with the existing provider. Service providers hate the idea of losing a client to their competitor and therefore, they will try their best to retain you. The first information they will need is “why you want to cancel the account” and the second one will be “how can be retain you”. The answer should be: lower your fees and rates to be equivalent to your competitor. Many merchants fail to do this and when they find out it will lead to a lot of frustration. Just a phone call would have done the trick.

The primary lesson for you is call your provider periodically to let them know that you are up to date with the merchant account fees and rates of the competitors.

Contact one of our helpful account representatives to assist you in the setup of a high risk merchant account or offshore merchant account for a high risk merchant.