Being in a high-risk industry and trying to find a merchant account provider can be stressful and difficult. Read about the High-Risk Merchant Account Underwriting Process in this blog. Certain industries have a history of immoral activities, excessive chargebacks, and fraudulent activity. This has given the entire industry a bad reputation and they’ve been labeled high risk by most merchant account providers.
If you are in a high-risk industry and want to accept online or credit card payments, you’ll need to seek out a high-risk merchant account provider. Luckily, there are many highly reputable merchant account providers out there for you to choose from.
Applying to High-Risk Merchant Account Underwriting Process
- You’ll want to research the best high-risk merchant providers before applying for a service.
- High-risk merchant providers can have varying costs, rates, fees, and contract terms.
- You should spend time learning about each provider before applying for their services.
- Before you apply to a high-risk merchant provider, you will want to organize and prepare. You’ll be asked to provide incorporation certificates, shareholder certificates, passports, utility bills, credit processing histories for at least 6 months, and much other paperwork.
- Your application could be followed by an interview as well.
Red Flags for High-Risk Merchant Account Underwriting Process
- There are a variety of things that could raise red flags for your merchant account provider.
- Notifications from the Better Business Bureau or Consumer Financial Protection Bureau will cause merchant providers to instantly deny an application.
- Constant negative press or poor business practices could also cause a denial of your application.
- It’s always best, to be honest with your provider during the application process.
- You still may be able to get a high-risk merchant account.
- Explaining your problems and red flags could help you acquire a high-risk merchant account.
Other Problems That Will Raise Red Flags
- High chargeback ratios.
- Constantly changing merchant account providers.
- Debt collections or payday loan collections.
- Financial Instability.
Your merchant account provider will do a detailed analysis of your business, financials, and credit processing history to determine if you qualify for their account. They will verify that your business is legitimate and determine how long you’ve been in business. Also, They will perform a thorough credit check and review of your credit processing history as well.
Underwriting Qualification Standards
- Your underwriting will expect you to follow some basic qualifications that are defined by credit card brands.
- This includes following all federal and state laws.
- You must be financially responsible, and your company cannot perform a transaction that may be detrimental to the underwriter.
- Acquiring a professional high-risk merchant account might seem like a difficult task.
- If your business meets certain red flags, you can still find a high-risk merchant that may be able to help your business.
- We encourage all potential clients to research the top high-risk merchant account underwriters before committing to a service.
- Each provider offers varying rates, fees, services, and contract lengths.
- Finding the merchant account underwriting that is perfect for your business will be a challenge, but there are plenty out there ready for your business.
Call 5 Star Processing experts to understand the merchant account underwriting process. Call us at +1 888-253-9692.