To many traders, the idea of acquiring a merchant account will sound pleasant until they get to the underwriting process. Despite the global acceptance of credit cards as a payment method, retailers are often hesitant to open an account because of the lengthy vetting process that banks and other merchant services providers conduct to determine whether or not to give a business the account.

Underwriting is, therefore, a concern for many new business owners. Nonetheless, we’ve highlighted a few tips to help prepare and increase your chances of getting approved.

What the process entails

When applying for a merchant account, it is important to have prior knowledge of what the company will review while vetting your business.

  1. Level of risk

To the underwriter, some types of operations are riskier to work with than others. Industries with highly regulated or monitored products, such as pharmaceuticals will likely have a lower chance of passing the vetting process. The account provider will also consider aspects such as the years you’ve been in business and your credit history, and use this information to determine the legitimacy of your operation and likelihood of your success.

If yours is a risky business, do your homework to determine the providers that offer payment services to high-risk merchants. One such processor is First American Merchant; a renowned risk specialist and will likely approve your request for an account.

  1. Billing policy

Your prospective provider will want to know whether you bill your clients in advance or after you fulfill your end of the trade. Businesses that finalize the books before rendering goods or services have a greater risk of chargebacks because a customer has the time to change their mind.

For instance, if you run a hotel that accepts bookings in advance, you’ll need to refund a client if they change plans before the set date. Too many chargebacks can lead to the fall of a business, and this is an eventuality that the underwriter will seek to avoid.

  1. Processing volumes

Even when your business is high in the risk-assessment scale, an account provider can consider granting you approval if your sales are high enough, and your operation will bring steadfast processing revenue to the firm. Newly-started businesses, therefore, have a slimmer chance of getting a merchant account than already established enterprises.


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