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
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.