shut down merchant account

What to Do If Your Merchant Account Has Been Shut Down

One of the most impactful and stressful situations for business owners is receiving notice that your merchant account provider will no longer work with your company. This news can harm your potential sales, customer satisfaction levels, and affect your business in countless ways. It is possible that notice of a merchant account shutdown has come completely out of the blue and the most important thing you can do is find a new payment processor as soon as possible to minimize damage to your business. In this guide, we look at the potential reasons for a merchant account being shut down and the steps you can take to resolve the issue with minimal impact on your clients, turnover, and business operation.

What Are The Causes Of Merchant Account Terminations?

There are many reasons a merchant service provider may decide to terminate your merchant account, including:

  • Chargebacks. This is easily the most common reason for merchant account shutdowns. Businesses that have recorded too many chargebacks are highlighted by merchant service providers as “high risk” and run the risk of having their services shut off. If chargebacks amount to even just 1% of your total charges, this could be reason enough for a shutdown. Read more about Ways To Avoid Chargebacks.
  • Manual or “Forced” Transactions. This is easily the most common reason for merchant account shutdowns. Businesses that have recorded too many chargebacks are highlighted by merchant service providers as “high risk” and run the risk of having their services shut off. If chargebacks amount to even just 1% of your total charges, this could be reason enough for a shutdown. Read more about Ways To Avoid Chargebacks.
  • Misuse of a Merchant Account. This is classified as when a merchant uses their account to sell services or goods that were not disclosed when applying for the account. For instance, perhaps your business has expanded and you are now selling products or services that are considered high risk. If you have not notified your merchant service provider, they may terminate your account and blacklist your business.

What to Do If Your Merchant Account Is Shutdown

If your merchant account has been shut down for any of the reasons listed above, all is not lost. Opening a replacement merchant account is achievable in a few simple steps:

1. Find Out Why Your Account Was Terminated

The very first step is to discover the exact reasons why your merchant account was terminated in the first place. It is good to know this information and more than likely you will need to explain to your next merchant account provider why your last account was shut down. Ask your merchant account provider to give a written statement of the reasons why your account was closed and have this ready before proceeding to the next steps.

**Important Note: Do not hide any information from new applications for a merchant account. Your new merchant service provider will eventually find out and it could lead to your account being closed again.

2. Request Your Statements From The Shutdown Merchant Account

You will need to provide statements for the last six months for your closed merchant account. Try to access these while you can still log in to the online reporting system. If your access to online reporting has been restricted, you will need to mail order copies of the statements before applying for a new merchant account.

3. Contact High Risk Merchant Account Experts

It is highly unlikely that your business will qualify for a regular merchant account after a shutdown. The best practice is to contact experts in high risk merchant services who can help you find the best deal for your business. High risk credit card processing service providers are used to dealing with businesses in your situation and will assist you in accepting credit card payments again as quickly and smoothly as possible.

4. Don’t Lie About Your Situation

When contacting a high risk merchant service provider, do not lie about your businesses’ situation. Many merchants believe that sugar-coating the truth will help them gain access to merchant services again quickly, whereas the truth is it will only hinder the process. Be upfront and honest about why your merchant account was shut down, what services and products your business provides, and any other relevant information. This will result in a suitable merchant account for your business and situation.

5. Remain Compliant

The most important advice is to not make the same mistake twice. Once you have found a new merchant account, ensure you remain complainant with the terms of your agreement at all times. Many high risk merchant accounts are terminated within the first six months due to non-compliance. To avoid finding yourself in the same situation, stay within the terms outlined by the merchant service provider.

If your merchant account is terminated, whatever the reason, there are still options for your business. At EthosPay, we specialize in working with high risk merchants from a range of industries who have been rejected elsewhere or had their merchant account terminated. Talk to us today and see how we can have your business processing credit card payments again within 72 hours.

mobile merchant account myths

High Risk Merchants Can’t Use PayPal

Major payment processors such as PayPal and Stripe have become a very popular option for many businesses around the globe.

Read more
how credit card processing works

How credit card processing works

An insight into the ins and outs of credit card processing including the structures, processing stages, and how and why payments are declined.

Read more

Trusted by 1377 merchants.

We’ve helped match all kinds of businesses with the perfect merchant banking solution.

prwebyahoo!linkedInfacebook