merchant account underwriting

Merchant account underwriting

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When reviewing an application, underwriters assess the risk associated with the applicant’s business

“Referees of risk”

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What they’re considering Business type


Industry

Product / service offering

Formation (sole prop, LLC, corporation, etc)

Online vs. Brick & Mortar

Business type



Years in business


Years in business

In the underwriter’s view, businesses with long tenures are more stable, so the risk of underwriting the account decreases over time



Years in business

Chargeback history


Chargeback history

Extensive chargeback histories are a major red flag for underwriters

If the seller doesn’t have funds available to reimburse the buyer, the underwriting bank is left responsible for the funds

charge·back [chahrj-bak] noun.

1. banking - the return of funds by a seller to a buyer's debit or credit card account



Years in business

Chargeback history

Billing policy


Billing policy?


Billing policy? After goods or services are rendered



Up to 30 days in advance



Up to 30 days in advance

Far in advance



Years in business

Chargeback history

Billing policy

Owner or signer credit score


Owner/signer credit score Credit score carries a lot of weight in the merchant

account underwriting process

Sometimes, business financial statements can be reviewed in lieu of a credit check

Businesses with multiple partnerscan apply with a different signerif the application is declined dueto credit score


Here are some of the things they consider Business type

Years in business

Chargeback history

Billing policy


Processing volumes requestedwww.paysimple.com | follow @PaySimple | facebook.com/paysimple

Processing volumes requested All aspects of the application are weighed against the

processing volumes requested

Processing volumes indicate: Total dollar amount of funds processing Maximum single transaction amount

It is common for new businesses to start with lower volumes at first in order to build a processing history


Other alternatives

Upfront reserves

Holds

Daily fee withdrawal


Here are some of the things they consider Business type

Years in business

Chargeback history

Billing policy


Processing volumes requestedwww.paysimple.com | follow @PaySimple | facebook.com/paysimple

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merchant account underwriting

Business

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dueto credit

credit card account

credit checkbusinesses

considerbusiness typeyears

lower volumes

account decreases

funds available