If you want to accept credit cards from your customers, you will need a merchant account. Merchant processors accept credit card transactions for a fee and connect transactions with your business checking account. While it can be hard to find a bad credit merchant account processor, it can be done. Merchant account processors who specialize in high-risk fields are typically lenient with customers with bad credit, even if your business itself is not classified as high-risk.
Regardless of your credit standings, many documents are needed for applying with a merchant account processor. Driver’s license information, social security or visa number, and banknotes are commonly asked for. In addition, merchant processors may check your credit to verify your identity if you own a corporation. Contact the Internal Revenue Service for an employer identification number, as it may be a requirement for credit card processing.
You should be prepared to pay higher fees, regardless of the bad credit merchant account processor you choose. Each time a customer swipes her credit card at your terminal, a percentage, known as a discount rate, is paid to the merchant. The lower the discount rate, the more money you keep for each transaction. As you build a relationship with the merchant, the discount rate can be adjusted. The discount rate is not the only fee you should be concerned about. Lower equipment, application, and voice verification fees can make one merchant account processor more attractive than another.
If you are in a high-risk industry, merchant account processors may scrutinize your credit report more than they would for a merchant in a low-risk industry. High-risk industries include adult entertainment, gambling, e-cigarette sales, and pharmaceuticals. However, it is always best to consult with like businesses to find the best possible merchant account processor, as well as consulting your local Chamber of Commerce.
Bad credit merchant account processors exist, though you should consult many companies before deciding on your processor. Bad credit business owners should be very careful, as their fees will be higher, and with certain processors, the equipment may not be as advanced.
Consider all of your options for your bad credit merchant account