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.