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.