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6 Considerations for a Merchant Account Processing Limits Increase

Posted by Alex Neir on Tue, December 13, 2011 @ 01:21 PM
Merchant Account Processing Limits

The successful approval of any merchant account application is dependent upon the merchant account processing limits that are stipulated within the account application. The merchant account processing limits establish the boundaries for which the account must remain. Processing limits are defined with two account attributes.

  • The monthly processing volume
  • The high ticket or sale amount

Most businesses will estimate these attributes when establishing a merchant account to ensure room for business growth. However, if these attributes are exceeded the processor has the right to hold the excess funds until the overage is investigated and the processor is comfortable.

If your business’s monthly volume and high ticket amount have grown beyond that stated on your application, you can request a merchant account processing limits increase.

The acceptance of a limits increase is subjective so it is important to understand the factors considered for an increase.

  • Business Banking Balance
  • Business Credit Score
  • Business Processing History
  • Recurring Billing
  • Industry and Transaction Method
  • Reason for the Increase

Business Banking Balance – This is the amount of balance you are carrying in your business account from month to month. The underwriting department will want to see a strong balance in the account over the entire month. Not just the beginning and the end. This reassures the bank that if the increased limits result in chargebacks the business has funds available.

Business Credit Score – The credit score for the applicant(s) will always be investigated to ensure the applicant(s) are meeting their financial obligations.

Business Processing History – The business’s processing history will be reviewed to make sure the account has been managed correctly. The underwriting department will look to see if the account has exceeded the processing limits (soft limits) in the past. Chargebacks and refunds will also be looked at to determine how customers are behaving. Clean processing history is extremely important for an increase in processing limits to be approved.

Recurring Billing – Businesses that engage in recurring billing or automated re-billing are subject to higher levels of chargebacks and will undergo more stringent review for a processing limits increase.  

Industry and Transaction Method – Certain industries are considered more risky and will have tighter processing limits to protect the processor for chargeback liability. Additionally the transaction method will be considered when reviewing a processing limit increase. Retail, card present businesses will have an easier time than internet based businesses.

Reason for the Increase – The underwriting department will want and explanation as to why the business is asking for a processing limits increase. Has the business expanded product lines, delivery channels etc.

Business growth is the goal of every business. Excellent business management is the key to growing the limits established by your processor as a protection from liability. If you would like to request a processing limits increase, please contact our friendly staff at (800)917-8026.

Tags: Merchant Account Soft Limit, Merchant Account Processing Limits, Merchant Account Underwriting

Merchant Cash Advance | An easy way to get capital for your business

Posted by Alex Neir on Tue, December 06, 2011 @ 02:12 PM
Merchant Cash Advance

With the current climate in the lending industry it has become exceedingly difficult for small to medium sized businesses to qualify for a business loan. That being the case what other lending options are available to businesses to raise the cash necessary for business growth?

A merchant cash advance could be the answer.

A merchant cash advance is a lending instrument that allows your business to take advantage of future credit card receivables for an instant infusion of cash. The qualification process is quick and easy and your business can usually receive an advance in as little as 3 days.

How does it work?

Our underwriting department will analyze your merchant account statements to determine the cash advance amount you qualify for. The maximum cash advance amount available is $250,000. Once an advance amount has been identified that amount will be wired into your business account.  At that point a pre-determined percentage amount will be held back from each subsequent settlement for a pre-determined amount of time. The percentage amount held will be applied to the repayment of the advance. A percentage of future credit cards receivables is used to ensure that a hardship is not imposed on the business as would be the case with a set dollar amount. The advance is automatically paid back so there is no action needed by the business owner or staff.

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Qualification requirements

  • 500 Fico
  • $5000 per month minimum processing
  • Average retail ticket less than $600
  • 15 batches per month
  • Bankruptcies discharged for at least 1 year

Tags: Merchant Cash Advance, Credit Card Factoring, Cash Advance

Merchant Account Fraud – 3 ways to protect your business

Posted by Alex Neir on Thu, December 01, 2011 @ 03:33 PM
Merchant Account Fraud Protection

With the proliferation of the digital era more and more businesses are seeking the ease and convenience of the internet to increase sales. Unfortunately, the criminally minded have seen this as a giant opportunity to maliciously profit from unsuspecting businesses. As a business utilizing the internet as a sales channel how do you protect against potential losses from such criminals?

The answer is a fraud detection solution.  

Most fraud detection solutions are based on a management utility that allows merchants to configure extensive filters to help in detecting fraud and screening suspicious transactions. The combination of an extensive reporting system gives merchants a quick and easy way to review transactions, block suspicious activity, and zero in on malicious users.

3 ways to protect your business from merchant account fraud utilizing a fraud detection solution.

  1. Thresholds – Allows your business to set specific parameters for detecting fraud
  2. User bans – Ban specific users by IP address, credit card number, country, etc
  3. Exceptions – Set specific exceptions to make sure you don’t exclude legitimate customers

Merchant defined thresholds

Thresholds let your business define rules that are applied to each order as it is processed. Rules can be simple to complex and can apply in sequence. For example you can define a dollar limit for a specific order, total for the day or week. You can also set up limits for the number of orders in a given day or week.  Limits can be linked to a specific IP address or credit card number. Additional features allow for limits to be set for the number of credit card numbers that can be used. This eliminates criminals from testing cards for approval. Once your specific rules have been configured you can set the system to flag the transactions for review of decline them immediately.

Merchant defined user bans

In addition to dynamic transaction review, static user bans are effective at eliminating known threats. For example if your business is experiencing repeated fraud attempts from a single IP address or band of IP addresses you are able to configure a specific rule to eliminate the threat. You are also able to ban specific credit cards numbers or bank bin numbers to eliminate credit cards from a suspicious bank. Known problematic geographic regions can also be banned. 

Merchant defined exceptions

With any good fraud detection solution there will always be exceptions to the rules you establish. A proper fraud management solution should allow for specific overrides to be defined making sure legitimate customers are not prevented from a successful purchase.

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Tags: Online Fraud Protection, Merchant Account Fraud, Fraud Reduction