Bad Credit Merchant Accounts

Jun 26, 2013

A credit card applicant’s history is essential information when making an application for a merchant account, this history could either be good or bad credit. Credit card providers usually favor individuals or businesses with good credit history. Those with a good credit history can easily secure merchant accounts and credit cards with high limits, low rates and desirable benefits such as reward points. Most merchant account providers are somewhat lenient to applicants with bad credit, its acceptable industry practice for some merchant account providers to shy away from applicants with bad credit. Bad credit doesn’t necessarily stop an individual or a business from accessing a credit card and a merchant account.

Whether its Credit card processing with no credit or getting a merchant account with bad credit, it’s important to first know your credit score before making any merchant account application. When an individual or a business decides to initiate their own search for their respective credit score, it’s usually called a soft inquiry. This type of check usually has no known negative impact on the credit score as opposed to a credit check by a creditor commonly known as a hard inquiry, that could result in lowering the credit score of an applicant.

Credit card processing with no credit or with bad credit simply means working towards lowering your risk as merchant account providers are known to have low risk tolerance. The level of discount paid out by the merchant account holder is one of the determinants of getting a merchant account with bad credit. Every time a customer swipes a credit card to make a purchase from your merchant account, a discount rate is usually paid to the merchant. Merchant account holders with bad credit would ordinarily be expected to pay higher discounts rates. There is always the possibility of adjusting the discount rate as a business builds a relationship with a merchant account provider over time.

Getting a merchant account with bad credit could also entail making arrangements with persons who are more creditworthy, to be included as an authorized user in their older credit cards. This does not necessarily mean being granted access to the card, but an inclusion of an individual’s name as an authorized user to that account. Once this is done, it usually leads to the more creditworthy partner lending their credit score to the one with the bad credit.

You could also engage the services of a specialty firm like eMerchantBroker, which specializes with high risk merchant accounts. Such specialist firms have no problem handling customers with bad or no credit at all. To guarantee that a merchant account application with bad credit is approved, the applicant has to be prepared for certain requirements like rolling reserves. A rolling reserve ensures that the credit card processor is left with some funds, just for a while to cover any payment defaults that might occur.

In the event that an individual or business faces challenges in locating reliable and trustworthy high risk merchant account providers, there is always the option of engaging the services of a independent sales organization. That essentially acts like a middle man in pairing merchant account applicants with merchant account providers.


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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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