If only the answer to this question was as easy as applying for a merchant account with a preferred provider then it would be useless to read this further. However, very few credit repair business owners who apply for merchant accounts with their local banks or pretty much any other payment processor qualify. The next alternative would be to go for a high risk merchant account for Credit Repair Company.
So how then do I get a merchant account provider for my credit repair company?
Almost every card processor or sponsor bank will gladly allow any ordinary storefront retailer to use their service. Regrettably, credit repair companies never qualify that easy. Not because the staff in charge is against your business, but rather for the reason that their sponsor bank or processor won’t write a credit repair business due to chargeback and regulatory risks.
So anytime you call a merchant account provider, be sure to state clearly (I’d ask twice, most salespersons are quick to say “yes”) that you are in the credit repair business. No need wasting your time only to get you application tossed in the “prohibited list”.
Is there a way I can increase my processing volume?
Most credit repair companies scale their proceeds to $100,000 or even more in sales per month. Unfortunately, new merchant accounts are limited to around $25,000 to $50,000. But how can you get a higher processing limit?
A merchant account may as well be looked at as a line of credit that runs from the processing company to you. And as with loans, your record will allow you to achieve a larger line of credit—which means a higher cap.
And while you may boast of a good personal credit, you never reap of its fruits until you put it to proper use. So on average, after three to six months of proper processing (meaning stable volume, steady chargeback ratio, foreseeable transaction volumes etc.) you can appeal for your account to be evaluated and achieve a higher limit.
What do underwriters look for when reviewing applications?
The underwriter’s work is to ensure your business is a fair risk (from a regulatory and chargeback perspective) for the card processor. They are particularly avoiding risks like unpaid bills or chargebacks as well as fines the processor may face if the business operates against US regulations e.g. illegal credit repair activity or fraudulent transactions. All told, they are searching for well established businesses that understand the credit repair regulations.