Nothing will result in a more complete standstill for your business than an issue with your business’s payment processing abilities.
Regardless of whether it is a freeze on your processing ability, withheld funds or the termination of your processing account, these situations can often result in devastating effects for your business.
The good news is there are some things you can do to avoid issues related to merchant account freezes, holds and terminations, with five tips found here.
There are two types of agreements: a direct agreement and third-party agreement. In some cases, merchants operating in specific industries may also require a unique direct agreement, which is called a high-risk merchant account. It is important that you get to know the options available to determine which one is right for your business. After all, a small retail shop and a large box store will not need the same processing power or abilities.
Did you know that making too much money may become an issue? Processors want to see stability. They expect you to have a steady processing volume from one month to the next.
When filling out a traditional merchant account application, you will present information about your average transaction size and expected volume. This information is then used to identify any suspicious activity.
If you want to avoid issues, make sure to let your processor know if you are going to have a busy month and take in more sales and transactions than usual. This will help prevent the aforementioned flags for suspicion.
If you misrepresent your business and don’t sell what you said you would, this may lead to having your account terminated. You should never try to lie or “fudge” the details on an application because you may be considered a high-risk industry that would require higher interchange fees. While it may be tempting to try to bend the truth to reduce the fees you have to have, in the long run this is going to backfire.
Another way you may have your merchant account closed is by using it for several types of business. Any type of suspicious or unusual activity can result in a review.
If you have several transactions that don’t “fit” the type of business you claim to be doing, it can indicate something inappropriate. It may also affect your processing limits.
While chargebacks are inevitable for most businesses, they also represent a fast way to freeze, hold or terminate an account. This is a clear indication that the processors aren’t delivering the services or goods promised.
To avoid chargebacks, provide customers with the high-level product or service promised, or provide gift cards rather than a chargeback to the credit card processor.
Handling Problems: Prevention Is Key
If your account does face a freeze, hold or termination, you will have to work with your processor to have it reinstated. The best option is to avoid this from occurring to begin with by using the tips found here. You can also contact us at Velocity Merchant Services to receive help and guidance with choosing the right processor of find us online at getvms.com