Why do applications and accounts gets declined?
We often have said to us "your
website states you can accept most businesses and also high
risk, so why did you decline me?"
Yes, we can provide merchant accounts
to quite a lot of businesses, however we do have our limits
as do the banks that we use. Remember it's not just the
business model or processing volume that matters, it's also
how you sell your product or service... plus a few other
why your application may get declined.
1. Business or industry
Sometimes an industry is simply
too risky even though it may be legal.
When we talk about risk we mean
the risk taken on by the bank or processor and is often
due to the amount of Chargebacks
that could come in that the bank would have to fund if
it all went wrong - as well as the risk of large fines
issued to them by Visa or MasterCard (often in the millions).
2. How you sell
How you sell your product or service
is the second thing we look at. For example selling only
via the phone (MOTO) or only via outbound sales is riskier
then through a website as hard sell tactics can be, and
often are, used.
One thing that often amuses us
is when we receive an application for call-blockers (to
block cold calls), and on the application they state that
their only sales method is cold calling... most never
see the irony.
3. Is it legal
This isn't always straight forward.
Sometimes the product you are selling may be legal but
how it can be used is not. For example we get a lot of
enquiries regarding swegways (balance or hover boards)
but can not help this industry because even though the
swegway themselves are legal, you can not use them on
public roads or footpaths.
4. Monthly volume vs transaction amount
A merchant who has a modest monthly
processing volume of say £5,000 and an average transaction
amount of £500 might raise a few questions. It is
possible that the merchant only processes a small number
of transactions each month, or it could mean the merchant
is in fact hiding revenue???
A small note regarding this - On
the application you will be asked to provide a monthly
online turnover. These will most likely be guesstimates
as 80% of applicants are new to cards. Because of this
please do not over exaggerate these estimates as they
can in fact seriously hinder your application. Certain
applicants think by exaggerating the amounts we will be
more keen to help them. However this is not the case and
will in fact make you look riskier.
5. Country of incorporation
There are certain countries in
which acquiriers and payment processors simply can't do
business with. These countries may include ones known
for corruption or may be more of a political hot potato
(a problem so controversial and sensitive that it is risky
to deal with). These include Russia, several African nations
and more obvious ones such as Iraq, Afghanistan, Syria
etc. but also some lesser known ones such as North Cyprus.
There are also specific countries
from which the banks do not allow transactions. These
countries must be removed from a websites drop down list
when a customer is completing their order.
This is mainly needed when setting
up high risk or adult accounts. The banks and processors
that we use to set-up high risk accounts like to see at
least 3 - 6 months worth of processing with the same bank.
Processing history that is shared amongst two or three
banks in a short period of time can often mean that the
account kept being shut down.
It can also mean that you have
several processors that you use and we would be one of
many. Therefore who's to say that the processing volume
you provide would in fact be processed by us?
There are exceptions to this as
certain industries, such as gaming, will often have several
processors being used at once to spread their own risk.
This is perfectly understandable.