What to Do if Your Merchant Account Gets Shut Down
When a business relies solely on a merchant account to process customer payments, having the merchant account shut down can be financially painful. If a business’ account has been shut down, it’s critical to get up and running as quickly as possible to prevent total devastation to the business.
Credit card processors have reasons for terminating merchant accounts, and usually do it with little or no warning.
For some businesses, getting shut down isn’t a complete surprise. With excessive charge backs and a failure to settle with customers, it’s rather easy to get terminated. In these cases, businesses may land on the TMF (terminated merchant file) or MATCH list, which can prevent them from being approved for a new merchant account with other providers.
Sometimes a merchant’s business practices will lead to termination. If a merchant does not carry enough funds in their bank account to cover credit card processing fees, the bank immediately questions the financial viability of the business. In other cases, a merchant’s failure to adhere to guidelines, such as maximum monthly processing volume, may be a reason for termination.
In recent cases, some processing companies have simply done a reassessment of the risk involved with certain industries – and then chosen to no longer service those businesses that are part of that ‘high risk’ industry. This has happened to travel service businesses, electronic cigarette retailers and several other industries.
If your merchant account has been shut down, contact your credit card processing provider and request an explanation. Depending on the circumstances, there’s a possibility it can be reinstated quickly.
But if the processor is unwilling to reinstate your account, you’ll need to find another merchant account as soon as possible. Simply being terminated does not mean that you are a high risk merchant and you should be able to get approval from another provider. Collect the past six months of processing statements so that you’re ready to present them to a new processor upon request.
If you’ve been terminated based on risk but do not have excessive charge backs, you should be clear from the TMF. As a merchant selling products classified as higher risk, you will need to find a high risk provider. Getting approved is not that difficult, but as a high risk merchant, you can expect to pay slightly higher rates.
If your merchant account has been shut down and you need some advice, contact The Transaction Group (TTG). At TTG, we find merchant account solutions for all types of businesses throughout the world.