Guaranteed merchant account approval

Merchant account providers use guaranteed merchant account approvals as a marketing tactic to attract merchants. In actuality merchant account providers cannot guarantee that any merchant account application will be approved.

Acquiring banks and third-party processors are the main players behind the processing of electronic bank card and credit card transactions. Each of these entities has a set of underwriting guidelines that dictate who they can issue merchant accounts to. Underwriting guidelines cover many different aspects of a merchant ranging from business type to the personal credit standing of the owner (assuming the business is not publicly traded).

These underwriting guidelines make it impossible for any merchant service provider to guarantee a merchant account approval. If a merchant that does not satisfy underwriting guidelines applies for an account they will be declined.Individual processing banks have different underwriting guidelines. Some are more strict about the types of businesses that they will accept where others focus more on the credit standing of the business owner.

Many merchant service providers will take advantage of varying underwriting guidelines by working with various processing banks in order to approve the maximum amount of merchant applications - if a merchant is declined by one processor, the provider will submit the application through another with more favorable guidelines for that particular merchant.

While the ability to submit merchant account applications through various processing banks will increase the percentage of applications that a provider can have approved, it by no means makes it possible for the provider to guarantee merchant account approvals.

• Are merchant account rates and fees guaranteed?

Questions & Comments