What Do I Do if My Merchant Account Application is Declined?
The merchant account application process can be tedious and costly, so disappointment is understandable for those businesses who end up getting denied. However, it doesn’t mean to throw your hands in the air and give up hope. Payment gateway service providers vary from one company to the next, and what may have been grounds for denial with one provider doesn’t guarantee being declined from another. Certain providers may be more lenient and willing to take on higher risks than others, while some applications simply need to be touched up and given another chance before receiving a stamp of approval.
If your merchant account application does get declined, there are steps that can be taken to try and improve the likelihood of eventually obtaining a merchant account. Here are some recommendations in case you find yourself with a denied application.
Put Your Commitment on Display
Not all declines are final, and many account providers are willing to reconsider their decision after an honest discussion about the risks involved. Reply to your notice of disapproval letting the provider know that you’re willing to have that discussion: ask whether there’s anything you can do to help earn their approval.
A common reason for a merchant account application getting rejected is the higher risk associated with certain industries. If you are denied based on concerns dealing with financial risk and security, then offer to help cover some of the risk. One possible way to do so is by opening a security reserve. While paying more than what’s necessary may appear counter-productive to some, it actually shows the underwriter how dedicated and committed you are to not only building and growing your business, but also how much you desire their services and value the opportunity to work with them. Think of it as putting your money where your mouth is when trying to convince the processing provider to approve your merchant account application.
Research the Market
Each of the many payment processors out there is bound to approach the merchant account application process differently from the next. Certain processors are averse to any risk, while others will only cater to those businesses involved in higher risk industries. If your application is denied, there’s a strong chance that the provider was essentially saying, “it’s not you, it’s me,” rather than that you’re stuck with a hopeless business model.
Make sure to put in the proper leg work and research to enable you to make the right decision when applying for a merchant account. This will also help cut costs on application fees and prevent you from applying to providers that don’t even deal with businesses in your industry. It may require a lot of investigative work while you analyze all the different options, but it goes a long ways towards the ultimate goal of receiving approval.