Providing high risk merchant services is never boring, never without its characters and certainly never without its challenges. Sometimes the boarding process goes smoothly and other times we face hurdles and roadblocks.
After more than 15 years in the high risk merchant services business, we’ve just about seen it all.
Just within the last six months, we’ve had two merchants go through the entire merchant account boarding process, only for us and our acquiring banking partner to discover they were fraudulent.
There are certain know-your-customer documents that are absolutely necessary when applying for high risk merchant services. Without them, there is no going forward.
Simply, Instabill and the acquiring bank with which we match a business need to know a merchant’s payment processing history and to ascertain there is working capital in their bank account (for working startups, we’ll consider alternative documents).
What not to do: Recently, we had a merchant begin the application process when we discovered he had a negative balance in his business bank account. Acquiring banks need to see a certain amount of working capital.
If a merchant must register his/her business in a different country, a degree of knowledge about that country’s business laws and regulations is necessary. Merchants learning as they go is a perilous method that could have fatal implications.
What not to do: Ignore Visa’s new cross border regulations. Merchants need to pay close attention to these regulations when applying for an offshore merchant account.
We, along with any acquiring bank, need to know who the owners and stakeholders are — with over 10 percent ownership — with any business.
What not to do: Stall and not be transparent. We once had a merchant stall in providing the identification of his business partners. With each passing day, we felt he was hiding something. So we passed on his merchant account.
Acquiring banks and payment processors love a website with clear and competitive pricing, as well as contact information (phone and e-mail) and return policy.
What not to do: Hide or omit contact information – which can lead to a rejection from a merchant account provider. A contact form on the website is fine, but we prefer an e-mail address and even the option for live chat, if possible. There is nothing more frustrating for a consumer who needs to contact a merchant, and is unable.
Instabill has secured high risk merchant services for merchants who have imperfect credit and many who have even been MATCH-listed. These merchants may incur higher fees, but usually we can find a solution for them.
What not to do: Two weeks ago, we received an application from a merchant who sent all the necessary documents for his merchant account. He failed to tell us, however, that he had been on the MATCH-list, which was a game-changer for us. We’ve worked with MATCH-listed merchants before – those who have been honest and up front with us.
In this case, we figured if the merchant is dishonest from the start, s/he will be dishonest in the future.
We passed on the merchant.