There are many banks and payment service providers who will deny a merchant account approval based on a merchant’s risk level (read: high risk). It could stem from a number of reasons:
- Industry type: High chargebacks, high ticket items or reputational concerns (online gambling, online dating).
- The merchant’s payment processing history: Flawed or lack thereof.
- Location of a merchant or business: Certain regions of the world that experience unrest or high rates of fraud, such as parts of the Middle East and Africa.
What is a high risk merchant to do when he can’t get a merchant account approval?
Primarily, a merchant must examine – we mean really examine – his/her business model to reveal the reasons why a merchant account approval wasn’t granted. It can be a trying, humbling process, but absolutely necessary to gain future approvals.
Here are three areas to address to get that approval:
Clear, concise business plan: 6 key elements to include
When considering applications from startup businesses, we’ll accept a business plan since the merchant likely has little or no processing history. Whether you’re an e-commerce startup business or a longtime owner, presenting a sound business plan can only strengthen your case for an approval.
It should contain these six key elements:
- Marketing plan: Google Adwords? Facebook Ads? Acquiring banks want to know how a merchant plans to market his/her business.
- Sales predictions: How much revenue do you expect to raise in the first year? The first three years? Use your best, realistic judgement.
- Pricing: Be prepared to explain the rationale behind your pricing. Is it consistent with the market for the product you’re selling?
- Return policy: A clear and practical return policy should be prominent on your website.
- Contact information: Whether it’s an e-mail form or telephone number (preferable), contact information should also be easily located (best on the front page) of your website.
- Security features: Customers feel far more secure making an online purchase when visiting a secure (https) website. Using secure sockets layers and 3D secure processing is recommended.
Solid Personal Credit
Having solid personal credit history is an underrated tool when finding payment processing for a business. When Instabill merchant account managers are vetting potential merchants, a high personal credit score speaks volumes about a merchant. It is especially helpful when a merchant might have flawed credit card processing history in previous businesses. In some cases, it shows a bank that the prospective merchant is trading in a risk-laden industry, which takes away part of the onus.
Be transparent: We will work with you
We receive many inquiries each week from merchants seeking banking solutions for high risk businesses. We also converse with many merchants whose ‘businesses’ show distinct signs of fraud, which, we suppose, comes with the territory:
- Inconsistent pricing for products on their websites
- Blank spaces or critical information omitted from a merchant account application
- Industries that are, frankly, too risky
Acquiring banks and payment processing companies are going to ask questions – sometimes a lot of them – to find out more about your business. We believe the less questions they feel compelled to ask, the better; that it’s best to present information to them. Our advice to merchants is to show complete transparency when seeking a merchant account approval. Anything otherwise is a clear path to rejection.
Instabill wants to give your merchant account approval
Finding the best payment solutions can often be a tiresome deflating process. At Instabill, our merchant account managers are on your side. When we find secure payment processing solutions for our merchants, everybody wins.
Take 10 minutes for a conversation with a live merchant account manager today at 1-800-530-2444. Instabill remains with you every step of the way, and we do not charge fees until we get you your merchant account approval.
