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UNDERWRITING OF PHARMACY MERCHANT ACCOUNTS

Underwriting of the merchant accounts is done by certain banks. The underwriting is done for the acceptance of credit cards. The banks which can underwrite these are to have memberships in the associations of credit cards of Master Card and Visa. There is some process involved in the underwriting process of merchant accounts.

The risks are to be evaluated first. Those risks are analysed which are involved in allowing the acceptance of credit cards to a merchant. This is done by analysing the credit history of the applicant's organization. This is done in a detailed way. Also the previous history of the processing of the business is also analyzed. However this is to be done only if applicable. The purpose of this procedure is similar to that of approving a loan by banks. The loan can be personal or business loans. The banks conduct these procedures to ensure that the organization through which the merchant is applying for allowing the credit card is a responsible entity. This is very important for banks. The reason for this is that the service of merchant account is also a credit form.

Whenever a merchant receives payment by card it has to be authorized. This is done by the processing merchant bank. The bank also clear and settle the payment received by a merchant by card besides authorizing it. In a day the bank receives the details of transaction. The banks fund the cash. There are some cash to be deducted from the payment. This means the cutting of costs of processing. This is done by the bank. The rest of the cash is funded to the account of the merchant.

Now for the remittance of the payment is to be done. The bank has to wait for the remittance of it by the bank which issues the card. If the transaction is disputed by the issuer of card with initiating a charge back there are chances that the processor may not get the cash. The transaction can be disputed by the shareholder of the issuer of the card. Another possibility is the transaction being fraudulent. In these two cases there are chances that the processor may not be able to get the cash.

Also if the charge backs are generated consistently by a merchant a fine will be assessed by the Network of Credit Cards on the company processing the cards. This company would have underwritten the particular account. This is done if the charge backs are over one percent.

Usually merchants receive the processing service by ISO (International Sales Organisation). These are provided with the license by Network of Credit Cards. The merchant banks do have a relationship with them. The processing agreement has to be signed and once this is done, the acquiring back acquires the transactions of the merchant card. Now they have to fund the transaction. Before that the cost of processing is to be deducted from the payment as mentioned above. These acquiring banks are also issuers of cards. 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.