Bank Account for High Risk Merchants

Your payment processor will close your merchant account for a number of reasons the three most common are as follows:

• Breaking The Terms and Conditions – If you’re starting an online business you’ll want to get your credit card processing capabilities established quickly. Oftentimes, this means seeking out instant approval merchant accounts. However, this can result in a closed account if you don’t follow the terms you signed up for.
  
  Aggregate merchant account providers are the major ones like Square, Stripe, and PayPal, and although the approval process is fast, they don’t allow high risk business types. The reason many high risk businesses figure this out is by applying and getting canceled down the line. This can leave your company in a bad place as customers will be trying to make purchases, and see that their payments are declined.

• High Chargebacks – Chargeback rates play a major role in payment processing and are often a reason why certain accounts are suspended or shut down altogether. The ideal number is zero chargebacks, but most companies have an allowance of around 1%. If your customers are denied a refund, they’ll be more likely to take this approach and create a dispute. Keep your chargeback levels down to avoid any interruptions or audits from your payment processing company.

• Fraud – This is a reason that legitimate merchants don’t have to worry about, but banks are obligated to investigate. If they find reasons that appear as fraud such as selling faulty products or engaging in the clandestine exchange of money, then they’ll close a merchant account.