Payment processing is a crucial aspect of virtually any business. Fewer customers are carrying hard cash every day, which means that as a merchant, it is in your best interest to implement solutions that cater to cashless payments.
A merchant account provider can, therefore, be your most valued business partner. But what happens when they decide cut ties with you? Will that mark the end of your business?
Why A Payment Processor Can Suspend Your Account
Processors go to great lengths to ensure that every merchant they bring onboard can stick to their terms and conditions.
After approving the merchant account, the processor will monitor all activities for suspicious or risky behavior, and if any, contact the merchant for clarification. For instance, if you had stated in your application that your average transaction amount would be $100 and then your average spikes to $500, your processor will be concerned. Similarly, reaching the annual processing volume in just a few months would raise a red flag.
Such issues usually go away if you respond quickly and accurately. In some circumstances, however, a red flag can result in the suspension of payment processing services. More often than not, one of these three factors will be the reason.
Any fraudulent activity detected will automatically lead to suspension. Fraud can take many forms, such as misusing personal customer information, overcharging, not delivering products as advertised or not delivering at all.
- Excessive Chargebacks
A chargeback is a transaction that is disputed by a customer after a sale. Visa and Mastercard require merchants to keep chargebacks below one percent of all transactions they process. In reality, however, your processor will suspend your account long before you get to one percent to avoid losing any more money in processing costs and being fined by the credit card associations.
- Multiple Merchant Accounts
It is common for businesses to partner with more than one processor as a precaution against possible account termination, but most processors won’t knowingly allow you to open another merchant account with a different firm.
Has your account been suspended? Don’t panic
If your processor decides to let you go, you still have several stones to turn before you call it quits.
The first step is to find another processor as soon as possible. Remember, every card-holding customer you turn away hurts your bottom line. Mainstream payment processors will be reluctant to deal with you if a previous firm has suspended you, so, your best option will be to get a merchant account for high-risk business. High-risk accounts are typically costlier than regular ones, but at least you’ll be back in business.
Once you find a new processor, streamline your activities and deal with anything that could have gotten your account suspended the first time. A good merchant account provider will probably lend you a hand in managing fraud and chargebacks.
Lastly make it a habit to respond promptly to your processor’s requests. Most of the time, the concerns raised will be easy to explain. Cooperate with the processor, so that you can resolve issues before they become cause for suspension.