What are the views of traditional UK sponsor banks on high risk merchants?

Merchant Services Q&AWhat are the views of traditional UK sponsor banks on high risk merchants?
Bankim Chandra Staff asked 2 months ago
1 Answers
Bankim Chandra Staff answered 2 months ago

Traditional Credit Card processing companies and Sponsor Banks in the UK generally prefer to work with businesses from low risk industries. There can be many reasons why a British company will appear as a high risk-oriented merchant. The most common cause is the credit score. Acquiring banks evaluate the creditworthiness of the business owner before opening a merchant account. The solvency plays a critical role regarding the stability and the tenure of the account. If the business owner has excellent credit, then there is a huge possibility that he will be in a better position to handle future chargebacks and disputes. This is the fundamental reason why almost every merchant account provider in the UK runs a credit check for each application. The second reason can be cross-border transactions. Local banks prefer only to offer domestic Credit Card processing facility to merchants. International or Offshore payment service providers do provide cross-border credit card processing facility to British merchants. The industry in which the merchant operates in also plays a critical role in the underwriting process. Credit Card processing companies have strict guidelines for merchants from specific sectors. Britain based credit card processing companies follow merchant classification guidelines and specify each merchant as per the relevant MCC quotes. Some MCC codes are for high risk businesses. Merchants who operate in these industries are also known as High Risk Band Merchant. High Risk Independent Sales Organisations can assist these merchants with credit card processing solutions.