BAD CREDIT MERCHANT ACCOUNT FOR CREDIT CARD AND ECHECK PROCESSING
You are searching for a bad credit Merchant account despite of Bad Personal or Business Credit. It takes a lot of courage to start a new business. Business owners need strong mind and courage to fight all challenges. These challenges appear almost every day. This is not easy. Merchants also face more challenges when their personal credit score is bad. This issue comes from banking and financial companies.
Definition of Bad Credit Merchant Account
A Regular Merchant Account Offered To A Business Owner With Low Or Bad Credit Score. The company may be new or old. It may be from any industry. The only thing that matters here is the financial strength of the business and the promoters. This is fair from the payment service providers point of view. They want strong partners. Unfortunately, most of us face financial challenges sometimes in our lives. We see our credit score going down.
Companies may not increase the financial strength without a credit card processor. This is because customers prefer to pay by credit and debit cards. Less Payment modes mean less sales. Less sales mean less profit and it may lead to negative growth.
Credit Card Processing For Merchants With Low Or Very Bad Credit Score
The underwriting team handles approving the merchant account. This team looks at various factors before approving the account
- KYC or KYM(Know your customer or Know your Merchant). They check every document. False and manipulated documents result in immediate decline.
- Industry Type. This also plays a crucial role in decision making. We all know that banks hate the word risk. They want to play safe and that is the reason they say no to many High Risk Industries
- Physical and Virtual Presence. Most of the times the risk team checks the genuineness of the business premises by site audit. They may hire third-party agencies to run these checks. In case if the business operates via a website they look at all the pages of the website. yes, they check every page.
- Financial Standing of the Owners and Business. This is where they check the Bank statements, Credit Report and Business History. They do this to rule out the possibility of future Risk.
- Ticket Size and Monthly Transaction. They prefer to work with merchants that have small ticket size. Merchants selling high-value items but a lower number of transactions are High Risk. The Credit card processing industry is very competitive. There are many acquiring Banks, ISOs, Resellers and PSPs. They all try to offer solutions. Some may have a higher risk appetite. These processors are perfect for merchants with Bad Credit score.
- Expected Chargeback and Return Ratio. Historical analysis of the industry helps the providers to identify average chargeback ratio. If the industry has high Chargeback ratio then there may be a big question mark in the approval process.
- Merchants Location. Banks are not Racist but they have to follow local and international regulations. They will check the feasibility of approving the account in your country. Companies from countries that are facing UN and US sanctions are mostly said no. Countries with unstable democracy are also sometimes considered high risk.
Many processors approve these accounts but they put extra conditions. The purpose of putting these condition is to make sure that the financial institution avoids risk. Below mentioned are few additional conditions that the Bank or the PSP may put
Pro Tips For Approval Of A Bad Credit Merchant Account.
- Business Premises. Processing companies want to work with real companies. The company may be of any size. They want to make sure that the merchant is not a fly by night operator. Make sure you send the pictures of the business premises. You should also send the utility bill and lease agreement so that the underwriter knows that the company is real. A bank statement in the name of the company or the business owner also helps. Domain ownership proof that shows the address where the company is being operated from. The business license should show the same address that appears on the merchant account application. You should also share any other industry certification that may be available with you . These relevent certificates can be Industry Membership certificates, Chamber Of Commerce Certificate or Proof of Participation in renowned Trade Shows.
- Mode Of Operation. Processors Prefer Card Present transactions. This is because there is a lower chance of fraud in card present scenario. The latest EMV chip based cards have helped the industry in reducing card present fraud till a great extent. In case if you are an Ecommerce merchant then try to avoid MOTO or Virtual Terminal request on the application form. Most of the processors do not prefer to offer solutions to businesses that accept transactions via Phone or Fax. The best way to start with a Merchant account will be to satisfy yourself with simple API integration. The API integration can be done easily with most of the shopping carts.
- Website Compliance. Make sure you mention the following on your website. The companies legal name and the billing descriptor must be clearly visible on all major pages of the website. It is strongly recommended to display the customer care number and support email on the website. The menu bar must have a link to various policy pages like Refund, Terms, Privacy, Disclaimer and cookie.
- Delivery Time Frame and Shipping Partner. It is recommended to clearly state the timeline and the mode of service delivery. If you have an agreement with a reputed logistics company then share the same with the processor. This can increase the possibility of you getting a merchant Account.
- Speak the Language of the Merchant Account Provider. Some websites may be in other language then the language local to the processor. In this case offer a translation button on the website. Who knows if the processor will take additional efforts to find a language translator for your website.
Bad Credit Merchant Account Phone Verification
Phone verification is an integral part of the underwriting process. Before approving the merchant account the underwriters may call the support number that appears on the merchants application form. This is done to understand the business model and level of support. Setting a branded call greeting on the toll free number is a good idea. Make sure yo answer the call with a professional business greeting .
DBA, Business Name and Website Name Correlation
DBA is sometimes a fictitious name used by merchants. Some merchants use it because the legal name of the company is very long. We recommend that all these three elements must correlate. Fraudsters prefer not to have a similar DBA as legal business name. They do this to hide there identity from the customers. Use the footer section of your website to display a message that the website is owned and operated by the legal name of the company. You may also put the company number as it helps in creating a positive image of your business.
Processing History Of Merchants With Bad Credit
We all know that getting a credit card processing account is very difficult if the credit score is low or bad. To overcome this challange merchants must show the last 6 months processing statement if available. This can be the statement of any alternative payment mode as well. Echeck or Bank statement all will help. If you have a paypal statement then you must share it with the acquirer or the Payment Service provider.
Remove Some Products And Services That May Create Problems
That’s correct. In every industry there can be few products or services that attract more risk than others. The underwriting process is very complex. Underwriters focus more on the products that can attract more returns and chargebacks. Try to remove items that you think will attract returns,refunds,chargebacks and customer dissatisfaction. You may have 100 products out of these 100 products few may create challenges. Remove them before the underwriters look at it.
Check Your Online Reviews For Negative Rating
Every information that you place in the application and all other info that is available on the KYC document set is verified and cross checked. The Credit Card Processing company not only checks your credit score but they also check your online reputation. Thats correct if there are a lot of negative reviews about your website, company name, email or phone number then it can create a negative impact on the underwriting process.
Share Documents That May Show Your Financial Strength
Every financial institution wants to work with companies and individuals that are financially sound.In this case where your credit score is bad you should share information about your present financial strength. you credit score is bad but you still may be getting payments by regular business. Share your Tax Statement, profit and Loss statement. This will help the underwriters to take more risk. They may think that this applicant is financially not so bad. He or She has the capabilities of handling returns, Refunds and chargebacks that may arise in business.
Credit Card Companies That Accept Bad Credit
As mentioned above in this page that the payment processing market is very competitive. There are many payment services providers that are ready to onboard merchants with bad credit or low credit score.
There are various processors in Europe and also in north America that offer Credit Card processing account to most of the merchants with low credit score. Of Course they can not onboard everyone but they can certainly help a major portion.
We currently work with Payment Service providers and Payment Gateway companies in Usa, Uk, Poland, India, Hong Kong, China, Israel and few other european nations.
Getting Approved For A Bad Credit Merchant Services With Conditions
- Setup Charges. Getting a Bad Credit Merchant Services account approved requires a lot of extra tasks. This additional effort is paid off by putting setup charges. This also creates a positive image of the seller in the minds of the processor. A seller who is interested in creating a good business may not mind spending few hundred dollars as setup charges
- Fixed or Rolling Reserve. Bad Credit Merchant Account Providers reduce the risk by asking for either a fixed reserve or rolling reserve. A fixed reserve is an amount that the processor holds before releasing any further payment to the seller. A Rolling reserve is a fixed percentage of each transaction that is held for 180 days.
- Delayed Payout. Another Risk mitigation step is the arrear. Most of the online merchant account for a seller with bad credit have a weekly payout timeline. They hold the money for 7 Days or more.
Documents Needed For Bad Credit Merchant Services
- Business Liscence
- Identity Proof – National ID
- Proof of Residence
- Proof of Business Location
- Utility Bills of business owners
- Utility bills that shows the business address
- Last 6 Months Bank Statement
- Cancil Check
- Recent 6 Months Processing statement if available
Chargeback Alert And Notification For Merchants With Low Credit Score
Once you get a Merchant Account for Credit card processing then you should also use a chargeback alert and notification service. This service will help you to extend the life of your merchant account. Merchants with Bad Credit are at a bigger risk of getting the account closed becouse of chargebacks and Fraud transactions.
It is easy to start the checgeback alert service. Once your account is activated you can apply for the alert solution. With CB Alerts you will get notifications when disputes are raised by the card holder. Your support team can co-ordinate with the cardholder and try to resolve the issue. you only pay per alert.
Please Note :- The CB Alert Service pricing may change in future. Please contact us for detailed information.