10 Things…

What are the 10 Things that Credit Card Payment Processors consider when you apply for a Merchant Account?

1  Any past bankruptcy?

2  Any late or missed payments on bills/ debts.  What’s the frequency of these actions?

3  Any large amounts of consumer debt?  Over extended?

1-3B:  If you don’t have a Co-Signer or Letter of Credit from your Bank to cover the monthly credit card volume estimates.
If #1-#3 applies to you, then you will probably need a Co-Signer.  You won’t need a Letter of Credit unless your business model falls into a high risk category of similiar businesses.  Will cost more if financing equipment for someone who has poor credit or no credit history.

4  New, unproven business. Not a problem, as long as your business model is comparable to other businesses in your category type.  If it’s so creative, that they haven’t seen anyone else do it, then…?  If you are a variety store, then they have tons of statistics on that type of business.  If you have a membership website that people pay monthly in order to get long distance for their cellphones, then…?

5  Extremely high average sale amounts per transaction. You can’t help this if this is your business model, but you have to know that the higher the risk, the more expensive the transaction to cover that risk.  Ex.  $8- $30 per transaction pizza parlour is less risky than $500-2000 software packages.  Criminals don’t go to McDonald’s to use a fraudulent card, they attack businesses that carry high ticket items.

6  Not having a face to face retail situation. This you can’t help, but you are lucky, if you have a traditional retail/ face to face business, then that is the cheapest type of transaction.  Ex.  Retail storefronts are less expensive for payment processing than an over the phone home-based business where you are never face to face with your customers.

7  Having extremely high monthly credit card volume estimates. This you can’t help, but your credit worthiness will be matched with your monthly credit card estimates.  Ex.  A $5000/mth pizza parlour is less risky than a $50k/mth software company.  If you’re credit worthiness profile matches $5000/mth and you want $50k, then you’ll probably have to scale down or do #1-3B.

8  If the time between when you process your customer’s credit card to the time that they receive your product/ service is long. You can’t help this, if this is your business model.  Ex.  If customers pay ahead/ make deposits, and don’t get your products/ services till 6wks down the line, then there is a higher chance that they will cancel the order and waste everyone’s time.

9  If you got your current/ previous merchant account terminated because of excessive chargebacks or fraud, then you have probably been put on a MATCH List, and none of the Six Processors in Canada will touch you.

10 Businesses that are on the Prohibited List. If you are on this list, then you will not be approved by any of the Six Processors in Canada.  Will need a non-traditional, high risk merchant account.  We can connect you to companies that do this also.


One Response so far

Super-Duper site! I am loving it!! Will come back again – taking you feeds also, Thanks.

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