In part one of this two-part blog series, we went over some of the potential culprits behind your business being declined by certain credit card processors. Even if you’ve done everything right as a small business owner, your business may fall into certain categories or have certain risk levels that lead to many processors denying you service.
At Merchant Card Advisors, we’re proud to offer a variety of credit card processing services, including those for high-risk card processing needs and companies who might be denied service by certain other processors. In today’s part two, we’ll go over a few additional reasons why your business might get declined in certain cases, plus how you can manage certain of these conditions to ensure you are not denied.
In part one, we went over the way many credit card processors will separate their applications into various risk bins, including those potential clients who are high-risk based on their business type and other factors. In many cases, such processors will have high-risk rates and other fees that help mitigate these risks.
In others, however, certain processors will have prohibited business types that they simply will not serve at all. This varies between processors, as some have a larger tolerance for risk than others.
Unpaid Tax Liens
You may not have considered this area, but there are certain situations where your taxes might impact your ability to get approved by a processor. Namely, if you have outstanding tax liens that have not yet been paid, these will be considered “bad” debt and will be viewed by processors in a similar way to if you have a negative account.
One major note here: This category refers not only to unpaid taxes to the government from your business, but also any unpaid taxes on your personal account. The IRS will inform you of such liens and provide you proper documentation to resolve them – this paperwork can be shown to processors as you apply to inform them you have begun this process.
Significant Chargeback Volume
Something merchants will experience regularly when they begin taking CC payments is chargebacks, which can happen in cardholder disputes or may also take place in rare attempts of fraud. In still other situations, chargebacks might be present because the customer did not have the requisite funds in their account at the time of purchase.
The occasional chargeback is no big issue, but businesses that experience high volume of chargebacks may raise red flags to certain processors. However, this is just one factor that may deem a business “high-risk,” and as we’ve gone over in this series, this categorization does not eliminate you from consideration with all processors.
For more on the possible reasons why your business may be declined service from credit card processors, or to learn about any of our high-risk processing services, speak to the staff at Merchant Card Advisors today.