6 Reasons Your Merchant Account Application Was Denied

Friday, July 15th, 2022

It can be rather intimidating to apply for a merchant account. What if you applied and got denied? This article will help you with potential reasons why your merchant account application can face a denial.

Merchant Account Application Denied 

When you apply to a merchant services provider, the application process will evaluate you and your business information to determine the level of risks associated with your business. If you don’t meet the criteria set for a traditional merchant account, you’ll be tabbed as high risk. 

1. Bad Personal Credit

Your poor credit history can make merchant services providers shy away from you. For instance, you may have a long history of unpaid debt or failed business ventures. 

2. High-Risk Industry 

If your business is in a high-risk industry such as adult or nutraceuticals, traditional merchant services providers will want to stay away from your business. The reason is that high-risk industries are associated with a high level of fraud and excessive chargebacks.

3. Licensing Issues

Merchant account approval requires companies to have a business license. For example, this can be a business license. However, pharmacies and gambling sites must have stricter permits on where they can operate and what products they’re allowed to sell. 

4. Because of Discrepancy Between the Business Type and Sales Volume

If you’re selling handmade items part-time and you list an average ticket size of $200 and a monthly sales volume of $100,000, the merchant services provider will look askance at your merchant application. 

5. Poor Public Reputation

If customers have provided lots of negative reviews about your business, or you’ve provided poor customer service or deceptive sales tactics, expect to be rejected. 

6. Being Listed on the TMF or MATCH List

There is a private blacklist of merchants in the credit card processing industry. It refers to businesses with terminated or declined accounts. The list is known as the Terminated Merchant File (TMF) or Member Alert to Control High-Risk (MATCH). Businesses listed on TMF or MATCH should contact their acquiring bank to get off the list. 

Thankfully, there are reputable high-risk merchant services providers like First American Merchant that can help you with easy merchant account application. Even if you’re tabbed as high risk because of a poor credit score or for any other reason, First American Merchant won’t shy away from your business. You can be sure to get access to the most secure and affordable merchant services, including a merchant cash advance. 

Why Your Merchant Account Application Was Denied

There is more than one reason why your merchant account application can get rejected. Even if you’re classified as high risk, you can work with a reliable merchant services provider to get the best for your financial needs.