merchant account underwriting

Download Merchant account underwriting

Post on 17-May-2015

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Brief presentation from PaySimple that explores the world of underwriting for a merchant account.

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  • 1. Merchant account underwriting
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2. When reviewing an application, underwriters assess the risk associated with the applicants business
Referees of risk
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3. What theyre considering
Business type
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4. Industry
Product / service offering
Formation (sole prop, LLC, corporation, etc)
Online vs. Brick & Mortar
Business type
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5. What theyre considering
Business type
Years in business
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6. Years in business
In the underwriters view, businesses with long tenures are more stable, so the risk of underwriting the account decreases over time
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7. What theyre considering
Business type
Years in business
Chargeback history
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8. Chargeback history
Extensive chargeback histories are a major red flag for underwriters
If the seller doesnt have funds available to reimburse the buyer, the underwriting bank is left responsible for the funds
chargeback
[chahrj-bak]noun.
1. banking - the return of funds by a seller to a buyer's debit or credit card account
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9. What theyre considering
Business type
Years in business
Chargeback history
Billing policy
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10. Billing policy?
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11. Billing policy?
After goods or services are rendered
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12. Billing policy?
After goods or services are rendered
Up to 30 days in advance
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13. Billing policy?
After goods or services are rendered
Up to 30 days in advance
Far in advance
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14. What theyre considering
Business type
Years in business
Chargeback history
Billing policy
Owner or signer credit score
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15. 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
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16. Here are some of the things they consider
Business type
Years in business
Chargeback history
Billing policy
Owner or signer credit score
Processing volumes requested
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17. 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 aprocessing history
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18. Other alternatives
Upfront reserves
Holds
Daily fee withdrawal
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19. Here are some of the things they consider
Business type
Years in business
Chargeback history
Billing policy
Owner or signer credit score
Processing volumes requested
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20. Thank you!
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