Merchant Account Processors. Who Are They?
Credit Card processing business is very complex in terms of implementation and due diligence. Not every company involved in this industry can be considered a merchant account processor. Merchant account processor is basically a company which is directly involved in payment processing. This can be an acquiring bank or a payment service provider also known as PSP. PSP for acquiring banks have all the required documents and approvals to work as a Credit Card processing company or organization.
Merchant account processor underwrites the risk of a merchant by onboarding the business. Once the merchant is on board in that business can start accepting credit and debit card payments by utilizing a virtual terminal if provided or payments through the website.
Process Of The Underwriting Team
The underwriting process that is undertaken by the merchant account processor is also very strict. The risk team analyzes all the documents and understands the risk profile involved in onboarding that merchant. The Merchant must be financially stable and should have a good credit score. In case, if the merchant is not financially stable or has got bad credit score then also sometimes he may be approved.
The merchant account processors who approve businesses with low credit score are most of the times referred as high-risk merchant account providers. They charge a little bit higher than a low-risk Merchant account processor. The increase in pricing is primarily to secure the processing company from future risks.
Get Paid Directly To Your Business Bank Account
Based on the terms and conditions mentioned on the merchant account application and agreement the processor transfers the funds to the merchant’s business bank account. Merchant also gets a merchant account statement that clearly shows the details of all the transaction excluding the credit card information. This statement is vital for any business primary because this document can be used by the business to apply for another Credit Card processing account. Most of the payment service providers prefer to work with merchants with existing payment processing statement or history. This helps them to calculate the risk in a better way by analyzing the previous chargeback percentage and refund ratio.
Chargeback is a term which no underwriting expert wants to listen. Processors want to work with companies that do not attract chargeback but only attract profit. Having said that this is not possible in most of the cases because you will always have some customers who are not satisfied with your service or product. To reduce the chargeback ratio merchants can easily implement chargeback alert and notification services. This notification service sends alert to a merchant. Most of the times whenever there is a dispute raised by the cardholder. Merchants can easily utilize this time to resolve any disputes with the cardholder.
Sometimes processors say no to the business in that case if all of your doors are closed then you should look at alternative payment processing solutions. The best alternative mode of payment processing in the United States of America and Canada would be echeck payment option. It helps merchants in accepting transactions by utilizing the electronic check transfer system.
Most of the Echeck payment gateway providers do not charge any setup fee and they established the account within 48 business hours.