Merchant Account Termination
Your business just received notice that your merchant account is being terminated in 30 days! What are you supposed to do? It is very important to read your merchant processing agreement and understand the circumstances under which your processing privileges may be terminated. When your acquiring bank (processor) notifies you of their intent to terminate your account, that acquirer is required by their own MasterCard agreement to list your business and principal names and merchant information on the terminated "MATCH" file or "List".
MATCH List
If your merchant processing account has been terminated, then your information has been added to the MATCH List. MATCH stands for "Member Alert to Control High-Risk" (merchants) and it is a service run by MasterCard International and subscribed to by Visa, Discover and American Express. The listing will include the business name as well as the name and identification of the business principals.
Reasons for Merchant Account Termination
There are a number of reasons why a merchant's credit card processing account can be terminated. Any number of activities or occurrences can exceed the acceptable risk threshold of a merchant processor. Some of those reasons include the following:
- Excessive chargebacks due to merchant business practices or procedures
- Credit (or debit) card fraud conviction by a principal
- Suspicion that the merchant is conducting fraudulent business operations
- Deposits for transactions involving charge sales generated by another merchant
- Excessive number and amount of deposits for transactions unauthorized by cardholders
What to Expect When Categorized as a "High Risk Merchant"
For which ever reason, should your merchant account now be classified by processors as a High Risk Merchant Account, here are some characteristics of high risk merchant accounts that may be helpful for you to know ahead of time:
- Limited options for credit card processing.
- Merchant account application & approval times can take longer and the due diligence process is likely to be more strenuous.
- Expect that your merchant rates and fees will be higher, perhaps significantly higher.
- Requirement to maintain with the merchant processor a rolling merchant reserve of up to 5% - 10% of your monthly sales.
- Look into offshore merchant accounts and multi-currency merchant accounts