Sometimes, even though we have completed an application for Merchant Services, a merchant can still be the subject of a declined application. Not all applications are guaranteed approval, and although Visa / MC maybe able to provide structured approvals it’s not applicable to every profile and there is the reality of a straight out declined application. Let’s take a closer look at these factors and map out some of the top reasons why a merchant application would be subject to decline.
TYPE OF BUSINESS: All merchant service providers have restricted and prohibited business types. These are businesses who’s very product, conduct or type of service provided is considered high risk to Visa and MC (without even taking a transaction). These pre-determined restricted businesses would include anything illegal, such as gambling, anything that poses a security risk like Gun Sales. Even “iffy” businesses whose business policy maybe to provide their customer with something the merchant themselves cannot guarantee like Financial gain. It is almost impossible to guard against this as your business is what it is, so sometimes, you just can’t offer Visa and MC services. This is out of your control unfortunately.
BAD PAST: Again another subject where we have little to no control over. If the merchant has anything in their past such as fraud, they can be declined. There is an industry “black list” that all applications are checked against (known as M.A.T.C.H) this is a database solely created by Processors who have been hurt by merchants who, in one way or another, have gone AGAINST their contractual agreement with their processor thus causing the processor to loose money. Once a merchant is blacklisted, they would have to absolve the issue with their previous processor directly to be removed. If the merchant is currently Bankrupt or has an un-resolved bankruptcy status in their credit profile, they will be declined services. Poor credit history may cause a decline, we look more into this in the following paragraphs. Things like excessive customer complaints resulting in a failure by the customer to pay Visa (also known as a “chargeback”) would be another factor to deny a merchant processing. They will decline any applications with a history of “charge backs”
LACK OF VALID IDENTIFICATION: When reviewing these applications, Visa and MC are looking for identification, security that who they are reviewing is indeed who they say they are. Having no sin, no driver’s license nor any other valid I.D. to support your identity or your business’ existence they will decline an application. It is best to provide Clear support documentation for your person AND business, to ensure that who ever is reviewing the application can easily Identify who they are dealing with, where and how you do business etc.
INCONSISTANCY: As per above, with regards to the Valid Identification one is providing, it should be in sync with your application info. When inconsistencies is a factor, it can and will lead to a decline. For example, business phone number should link a customer to the business….it seems like common sense but often times, the applications are lengthy and sometimes confusing. The worst thing one could do is provide info and support documentation that is different from what is on the application, or conflicting in any way. For example, if your GST Form, issued when you started the business, is not the same address as the current location, then this support document will not help. Always try to be consistent in the application and support documentation you provide.
POOR CREDIT BALANCE: and the word BALANCE is so important here. Visa and MC do adjudicate a person’s personal credit profile for obvious reasons. They need to support the lending request. The Business income projection is as much a part of the adjudication as the personal credit check, in that, they look at how much you are taking in, in an average transaction. They ask how much the business makes monthly in order to assess the level of lending required. If you have very poor personal credit and are doing transactions of over 500.00 and it’s a new business, there is no Balance in this profile…the ticket is high which means Visa /MC has allot to loose without even taking many transactions. The business is new so there is no history of success or monies coming in. The ticket in this example is too high for a poor credit applicant to be approved for such a large volume transaction request. It is just too much for the provider loose out on. The Credit and Lending requested (business volumes) must be in a delicate balance, otherwise, one can be declined.
Hopefully in studying this we can take preventative measures by noting some of the major issues that cause them to not approve an application and try to learn what “not” to do!
If you have been denied due to “poor credit” – don’t give up!
We can help! Often we have had HUGE success with getting approval on merchant account applications that have been declined due to poor personal credit. Fill-out our quote form here and let us know your situation and we’ll get to work ASAP!
