How To Apply For A High Risk Merchant Account

Pre-Application For A High Risk Merchant:  Easiest Way to Begin

Often a high risk merchant wants to know whether or not an account will be approved before submitting a complete application.  Of course, a merchant will also be interested in finding out what rates will be.

 

A quick way to obtain the information is simply to submit a pre-application form, along with three months of processing statements.  The merchant will be informed of the likelihood of approval and anticipated rates. Although not a guarantee of acceptance, it is helps the merchant decide whether or not to move forward with a complete application.

 

In a pre-application, the processing statements are examined for chargebacks. Card associations require chargebacks to be less than 1%. However, merchants with higher chargebacks are often welcomed by high risk merchant account providers. Once the account is established, a good merchant account provider will have the expertise to help the merchant keep chargebacks low.

 

Application: Complete Package is Key for High Risk Merchants

 

Different banks have different due diligence requirements. Some banks will accept the pre-application plus a scanned copy of a drivers license or passport and Articles of Incorporation. Most banks will ask for business bank statements; current financials (P&L and balance sheet) or other documents.

 

If more documentation is requested, send it as quickly as possible. Otherwise, the account will be pended until the information is received.

 

Success: High Risk Account is Approved

 

When an offshore merchant account is approved, the merchant will receive a contract from the merchant bank.  The contract will contain all applicable terms and conditions of the account.

 

The bank issues a merchant identification number (MID). The MID is the signal that the merchant can begin using the account for processing.

 

Most international merchant banks will not have any limits on processing volumes. Banks are pleased with a steady increase in processing volume. If the merchant is planning an advertising campaign or otherwise expects volumes to grow quickly, it’s a good idea to notify the merchant bank a few weeks in advance of the anticipated spike in volume.