It's common for merchants to have security reserves, rolling reserves, or holdbacks from the credit card processor. In this discussion we explore how to reduce or eliminate them.
One of the worst situations to find yourself in is being stuck in an unfair credit card processing agreement. They can be costly and difficult to get out of. In this article we'll explore ways to get out of the agreement at painlessly as is possible.
Why do payment processors have holdbacks or reserves on your merchant account? In this discussion we explain the concept of future delivery chargeback risk, and explore how to reduce the collateral held on your merchant account.
What should you do if your merchant account application is declined? David explains why payment processors decline some merchants, and how to turn it around and get an approval.
Canadian merchants are protected by the Code of Conduct for the credit card processing industry. It's a set of rules that credit card processors must follow with the intent of protecting business owners from unfair pricing and contract practices. For example, it protects merchants from unfair price increases. In this video David explains the most important things that business owners should know about the code of conduct.
If you sell expensive products or services you'll find that many payment processors want to hold back some of your funds in a reserve, or may even decline your merchant account application altogether. In this video David explains why this happens, and what you can do about it.
How long of a contract should you be willing to sign when setting up credit card processing for your business? In almost all cases the answer should be monthly. Long term contracts should be avoided. David explains how to get a monthly agreement, and a few exceptions to the rule when long-term contracts can be beneficial.
Don't accept getting declined (without a good reason)
(Slightly edited from video transcript for greater readability)
Key Takeaways
1
You should seek a specific reason why your application was denied
You should find out specifically why your merchant account application was declined.
2
You should do a credit check
A recent bankruptcy or other negative remark on your credit report could increase the likely hood of a declined application.
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Whether its questions about this article, or you want to see how we can lower your costs. Don't hesitate to contact us.
Hello, David here at Merchant-Accounts.ca. This is a very short video explaining why you should never accept being declined for a merchant account without a good reason.
Declined merchant account applications
If you've ever been declined for a merchant account and you didn't get a clear answer as to why, you should not accept that. A lot of credit card processors over the years have a policy that they don't always tell the reason why an application was declined. You get a nonspecific message like: Dear sir, we look at many reasons, including credit score and remarks and product line, etc... In reality, that's not reasonable. You went to the effort of applying, they should tell you if you're not approved, and if not why? You could say that I understand that I didn't get approved, but I want to get back to you in the future. If I can prove my business track record with more years of activity, what can I concentrate on improving that would help me if I apply next year or the year after? I do want to work with you.
If you work with some of the bigger credit card processors, it tends to be, very anonymous and impersonal. If you work with a good credit card processor, they should certainly be willing to tell you. Think of it this way. If I have a potential client that I want to work with and I can't get them approved, I still want that business in the future. Why would I not build a strategy with them? They can come back to me once they've got another year in business with a better track record. Maybe they're a new company and they delivered their item and they can prove that the customers received the item and they were happy. If you are declined and you don't get a very clear reason as to why that is not reasonable, perhaps you're dodging a bullet because that type of credit card processor probably doesn't have very good support and it doesn't sound like a very relationship-based partner. They're not all like that.
At Merchant-Accounts.ca we are not like that. We will do our best to get you approved. If we can't, we should be able to clearly explain why. We should be able to come up with a strategy because it's not never, it's not today. We would love to work with you in the future if you can accomplish these things. Would you consider reaching out to us in the future? I want to work with you too. If you've gotten declined for a merchant account application, you're just scouring the web for advice, go and find out why.
Credit check
One last little bit of advice, do pull up a credit score on yourself. If you have negative credit remarks on yourself, like a recent bankruptcy or something you didn't know about that could also be negatively impacting your creditworthiness as well. That could be part of the reason you were denied. Also, every time you apply, all credit card processors have to do a credit check. It's part of the know your customer in anti-money laundering rules where we have to do this. If you like to have like 20 applications out there and you're still applying, credit card processors are very reasonable in thinking: "Hey, what's going on with this guy? There's something suspicious here." You don't want to carpet bomb; you want to be strategic in your approach.
Conclusion
If you did get declined try and find out why. If that did happen, please consider reaching out to us at Merchant-Accounts.ca because we're good at working with business owners who have complicated businesses and things like that. I hope this video is helpful. Thanks for watching. Bye now.
It's common for merchants to have security reserves, rolling reserves, or holdbacks from the credit card processor. In this discussion we explore how to reduce or eliminate them.
One of the worst situations to find yourself in is being stuck in an unfair credit card processing agreement. They can be costly and difficult to get out of. In this article we'll explore ways to get out of the agreement at painlessly as is possible.
Why do payment processors have holdbacks or reserves on your merchant account? In this discussion we explain the concept of future delivery chargeback risk, and explore how to reduce the collateral held on your merchant account.
What should you do if your merchant account application is declined? David explains why payment processors decline some merchants, and how to turn it around and get an approval.
Canadian merchants are protected by the Code of Conduct for the credit card processing industry. It's a set of rules that credit card processors must follow with the intent of protecting business owners from unfair pricing and contract practices. For example, it protects merchants from unfair price increases. In this video David explains the most important things that business owners should know about the code of conduct.
If you sell expensive products or services you'll find that many payment processors want to hold back some of your funds in a reserve, or may even decline your merchant account application altogether. In this video David explains why this happens, and what you can do about it.
How long of a contract should you be willing to sign when setting up credit card processing for your business? In almost all cases the answer should be monthly. Long term contracts should be avoided. David explains how to get a monthly agreement, and a few exceptions to the rule when long-term contracts can be beneficial.
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My name is David Goodale, CEO at Merchant Accounts.ca. I launched our business in 2001 and have over 20 years of expertise in the field of online payments. If you have a payments related question or project, and especially if it relates to multi-currency or international e-commerce don't hesitate to contact me. I'm always happy to help with an honest opinion, and enjoy chatting with folks from interesting businesses.
