Criteria for Approving a Merchant Account Application

Normally, merchant account providers do not disclose their criteria for approving or disapproving account applications. Most of them however, would like to see the following in an account applicant:

• A good business plan or signs of good business management. Of course, one of the best ways to determine that is to find out how long you've been in business. Two or more years of business is indicative of stability and good management skills.
• Most providers look at the goods or services you’re selling. Most would not approve applications from businesses that offer sex or adult products, drug paraphernalia, alcohol or tobacco. Such businesses are referred to as high-risk businesses. It doesn’t mean however that a high-risk business will not get any approval. There are ISO's that grant high-risk merchant accounts but with higher fees than its low-risk equivalent.
• Account providers would also look for business permits or any document that would prove you’re legitimate. For online businesses, the website advertising the product must be accessible through the Internet and the business license must also be available on the same website. Also for online businesses, the website must contain all the products being sold as well as their respective prices. Furthermore, policies on refund and delivery must be found on the website.
• Banks and other account providers will look at your credit rating. Just like filing for a personal credit card, account providers prefer that you have a good credit rating. It reflects your ability to pay your bills and manage your finances.
• Your location on the globe is also considered by account providers. Normally, foreign businesses are not granted merchant accounts because differences in legalities (in different countries) may pose difficulties in future dealings. Furthermore, the number of chargebacks may be greater compared to business that are situated in the US. Again, there are ISO's that accept applications from foreign businesses but charge a higher fee than resident businesses.
• The volume of your transaction is also considered. If you anticipate only a small amount of transactions, the bank may not find the reason to grant you a merchant account. On the other extreme, very high volume transactions also pose a challenge to merchant account providers. This is because high volume transactions are more prone to fraud and a lot of chargeback cases.

At present, because there are other acquiring institutions (other than banks) that offer merchant accounts, it is much easier to get started right away. Even if your business is considered high-risk, you can still obtain an account although at a higher price.

Apply for a Merchant account online, or contact NCC Processing today today. 1-888-215-9822