June 20, 2013

If you are lucky enough to be a business owner that has trained your customers to pay in cash or personal check, bravo. For the remaining 99% of entrepreneurs out there, the harsh reality is that our society is trending towards a cashless economy. Personally I rarely have actual cash in my wallet and have three or four different cards that I use on a regular basis. In fact, when I do have to go out of my way to visit an ATM, it seems more like a chore than anything else. Setting a reminder to stop at the bank. Getting out of my car to go inside. Sometimes even waiting in line. But I digress; back to the topic at hand. The reality is that customers want to pay for your products or services with a card. Now let’s look at some things that will help you get approved for a merchant account.

Knowing Your Financial Risk

If you have a business that currently or has previously taken cards, you have some sort of processing history. The important points to keep in mind here are the amount of chargebacks and refunds. If these numbers are high, this may be a red flag to underwriters and either a.) cause you to have a higher rate or b.) be outright rejected for processing. If this is the case, no need to worry though. Similar to personal credit, the reputation of your business can be repaired. This process just takes time and patience. In the meantime HMS can refer you to one of our partners that specializes in “high risk” processing.

Make a File For Your Documentation

Merchant service providers want to see accurate financial statements to approve applications for a merchant account. These can include P/L statements, merchant account statements, or other reports that show financial history. These are crucial as they show the reliability and consistency of the business revenue.


Don’t Fib About Future Sales Projections

Underwriting typically does not base approval on projected volume of sales. So adjusting this number in an attempt to get a better outcome probably won’t help you. But if it comes to light that you intentionally manipulated this, it might reflect on your business as shady and untrustworthy.

Accurate Business Descriptions

Be as thorough and accurate as possible when defining the type of business that you are running. This helps our staff identify your business needs such as POS solutions, e-commerce setup, or maybe a mobile swiper. It also is important because some industry and business types are on a list of high risk merchants and this requires extra steps to get you processing. Knowing these things upfront will help expedite the time it takes to get you setup and accepting payments.

Take Steps to Reduce Fraud

No one likes fraud. It is a headache and waste of time for merchants who just want to be made whole again. To payment processors it is an unfortunate part of doing business. It seems like there are always a select few“bad guys” that want to scam the system. That’s why it is important to put measures in place to reduce your businesses exposure to people who want to cheat the system. One of these is AVS (Address Verification System). In a card not present transaction it is used to match the address the customer provides to the address on file with the card issuing bank. If these do not match a warning is presented and the business can investigate further. Important fraud prevention steps are important to reduce the amount of risk and possible financial loss that the business can incur.

Categories: Merchant Services

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