Reasons Why Your Merchant Application Might Get Declined

Here are some of the reasons why your merchant application might get declined.
Redde Payments
3 min to read

Reasons Why Your Merchant Application Might Get Declined

For ecommerce businesses, the importance of securing a merchant account is crucial to their success. Merchant accounts offer international and local payment options for your customers. The more ways your business accepts payments, the more customers you can potentially satisfy and reach. The income opportunities are endless when you have a merchant account, which is why getting your account approved is so important. If you’ve applied for a merchant account before you already know it’s not the easiest experience. You need to provide proof or origination, liquidity, income and transaction statements. The most important part of applying for a merchant account is to convince the merchant account provider that your business is sustainable. If you can’t convince them - your application will most likely be rejected.

Five Reasons Your Application Might Be Declined

In order to get your application approved it’s best to understand why it might get declined in the first place. We are here to help and share with you the five top reasons your application might be declined:

  1. Your volume and ticket sizes don't quite work: Keep in mind that when applying for a merchant account you’re essentially presenting your business to your provider. Your numbers need to match with your business type. For example, the average ticket size of a restaurant might range from $20-$100. But if you write down your average ticket size as $10,000 this might lead to more questions. Your volume and ticket sizes need to be consistent with your services or with what you sell.
  2. You don’t have the proper documentation: This is probably one of the most common reasons for rejection. You need to provide the most accurate and most recent summary of your business including bank statements, chargeback rates and sales volumes. If you aren’t completely sure about which documents are appropriate, you should ask your merchant service provider and they will be able to assist.
  3. Your personal credit is poor: A merchant account is very similar to opening a line of credit. A good credit score is key! Knowing that your business is healthy and most likely to be around in the future is very important to merchant account providers. If you have other failed business ventures or an overwhelming amount of debt this could hurt your chances.
  4. Your business has a bad reputation: As a merchant services provider, we understand that customer complaints are imminent. Although, having more bad than good reviews can be a bit concerning and scare away most providers. However, with Redde we advocate on behalf of our merchants. We may require additional processing statements in order to complete the approval of your account.
  5. You have a high-risk business: Having a high-risk business can come with many hurdles. One of those hurdles can be getting a merchant account approved. Businesses can be categorized as “high-risk” because of high chargeback ratios, non-compliance or for selling counterfeit goods. Most banks avoid accounts with a high chargeback ratio because it might hurt their finances or even their relationship with other credit card companies and banks.
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We’re Experts in Account Handling and Risk Management

Here’s the good news.

We’re experts, so you don’t have to be! With Redde, we work with you from attaining all required documentation and information necessary to getting your account approved. We have industry veterans that specialize in mitigating chargebacks and risk. In order to get approval, you need a provider that understands unique business models and ecommerce platforms. It’s our job to understand what banks look for and to assist merchants with the onboarding process. We even go one step further! Once you’re approved we monitor your account with risk mitigation tools to ensure you are being protected from potential fraud. When you work with us, you’re part of the Redde family. With us, you will have a long-lasting account in safe hands. Let Redde help you with the details so you can focus on what really matters - running your business!

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