Applying for a high-risk merchant account can be an incredibly frustrating process.
This is especially true if you’re dealing with an inexperienced high-risk merchant account sales representative. Before you start shopping for a new, additional, or replacement high-risk credit card processing account there are a couple of very important things to do. And a few things NOT to do:
- Do your research on a reliable service provider. There are relatively few funding platforms (or acquiring high-risk banks), however, there is a multitude of high-risk merchant services providers working with those few banks. This means that finding the most trustworthy high risk merchant service provider will make the difference between getting approved for your merchant account or not. The merchant account provider you choose can also make a huge difference in the rates and service you receive.
- Do Not submit multiple applications. Most domestic and offshore banks will check to see if there are multiple applications in the process. This is an anti-fraud measure. Additionally, many high-risk merchant account providers work with overlapping funding banks. Consider this, if a person with poor intentions was to be able to open multiple merchant accounts simultaneously, they would be able to process a large number of fraudulent transactions over a very short period and flee with the money before being shut down. So having multiple applications with various providers can trigger a red flag and cause your account to be declined.
- Do Not hide any products, services, or practices. Deceiving a bank is not only a criminal offense but it will always come back to haunt you later. Eventually, the bank will audit your website and shut down your account if there is anything outside the realm of what was approved. There is also a good chance that any funds that are due will be frozen and collected for up to 6 months to protect the bank from fraud liability.
- Do make sure that all of your business and personal information, addresses, and customer service numbers not only match what is on the application but what is advertised anywhere online or in print.
- Do be very clear on exactly where your business is located and from where in the world the service is provided. This will save you time and frustration as well as help your merchant account representative to place your account on the best solution available with the highest likelihood of approval.
Now that we have that out of the way, let’s discuss how to prepare for the high-risk merchant account application process. This will give you the best chance of success and make it as quick as possible. High-risk merchant accounts are generally not approved on the same day, the way many retail merchant accounts are. High-Risk accounts go through a much more rigorous underwriting and will take between 48 business hours and a week to be approved and activated. You can download our checklist on the steps needed to start accepting credit cards.
How to prepare for a high-risk merchant application
First, gather together as much documentation as possible. Every high-risk payment provider will have slightly different merchant account application checklists (also known as Know Your Customer or KYC). For Instance, consider the following list:
1) Articles of Incorporation showing directors, shareholders, and beneficial owners.
2) Business License.
3) Voided Check/Signed Bank Letter of good standing. (NO STARTER CHECKS)
4) Copy of owners/directors Driver’s License or Passport. (Must be valid)
5) 3 – 6 months of previous merchant processing statements. (Excel sheets/screenshots are not acceptable)
6) 3 – 6 months of business bank statements. (Excel sheets/screenshots are not acceptable)
7) Recent utility bill less than 3 months old with the business name on it.
8) Screenshots confirming domain ownership of websites.
9) Any Marketing Material.
10) List of products or services sold with pricing.
11) A descriptive overview of the business model.
12) Supplier agreement contract if you are reselling a product.
13) NEW BUSINESS ONLY – Business plan including 6 months sales projections and marketing plan.
14) NEW BUSINESS ONLY – 3 – 6 months personal bank statements.
This may seem like an enormous amount of information to have to put together just to accept credit cards. However, it is the only way that banks and processors (who are liable for fraudulent activity) will be able to confirm that you are not only a legitimate business but are operating on a business model that will minimize their potential losses. This, by no means, is an extensive list as many times the underwriting department will ask for additional information. However, this information is enough to get most high-risk businesses approved. It is always best to provide as much transparent information in one comprehensive package. A complete package will allow a reputable and experienced high-risk payment processor to analyze your business’s risk level and place your account at the best source to take advantage of better rates and service.
High-risk merchant account underwriters can be suspicious of incomplete packages and in most cases will not even consider the account without a complete package.
The next step in the process is to choose the best High-Risk Merchant Account provider from your research (like Bankcard Brokers) and request an application. Do expect to answer some questions about your business and provide a little information upfront. For instance, at Bankcard Brokers we work with dozens of high-risk friendly banks both domestically and internationally which means that we will need to pre-underwrite the account so that we can provide the most accurate information and appropriate application.
Be wary of any sales representative who simply says “Sure I would be happy to do that – What’s your email?” This most likely means that they only have one source for High-Risk accounts and they may be wasting your time if your business happens to be outside of that bank’s underwriting guidelines.
If possible, type your information into the fields on the merchant account application.
If you have to have to complete the application by hand take your time and print very clearly – underwriters do not like having to try and decipher poor penmanship. Also, be sure to complete every field and if there are any questions call your representative directly.
Once your High-risk merchant account application has been submitted remember to expect phone calls confirming customer service or order lines. If there is any doubt about your business location you may even experience an unannounced “site visit” to verify your business. Make sure that the office space is in order and that your customer service lines match that of the business for which you are applying.
If for any reason your business is declined a merchant account and you have liked working with the provider you have chosen see if they offer alternative solutions before moving on to your second choice.
It may sound obvious but make sure that this provider will not be submitting to the same bank that already declined you. Also, tell the provider that you got declined and let them know any reasons as this will be helpful for them when it comes to placing the account. Knowing if they can help you will save you time! So many times merchants try and hide any declines, there is no reason to do this.
Choose a reputable merchant service provider over a cheap one.
If you are looking for a high-risk merchant account provider consider calling Bankcard Brokers’ team of skilled professionals with ETA – Certified Payment Professional credentials.
Our dedication to working transparently, providing world-class service, and acting with 100% credibility has led to our reputation as the high-risk industry’s trusted leader in payment processing.