How to Get Your Merchant Account Application Approved

So you’ve browsed through dozens of merchant account offers, and you’ve finally narrowed the list down to a handful that have the best features for the best price. The next step is to apply for one of those accounts and to make sure that your application is approved.

Why is there an application process for merchant accounts?

Even though there is stiff competition in the merchant account industry, banks do stand to lose money every time a credit card transaction is processed. This is due to the very clear policy on the part of the credit card companies, which states that each cardholder must receive the good or service that they’ve paid for, or get their money back.  And if you, the merchant can’t pay, then the bank that approved your merchant account is on the hook for that money.

In order to mitigate the risk of botched transactions as much as possible, merchant banks have an application process. This process traditionally comes with a fee, although if you shop around, you can find a merchant provider who will waive the application fee.

Getting approved

The surest way to get approved is to have and present strong financial statements. Many companies, especially those in the mid-size range, would rather keep their financial statements private, because they often contain sensitive business information. However, this is a way to hamstring your application for a merchant account. Showing proof of financial stability is the best way to assure underwriters that your company will continue to operate in the future.

For startups, the situation is a little different. Due to their nature, startups do not have a solid financial history, which makes them a risky product for payment processors. If this is the case, you can still provide additional documents that will help show your financial stability, such as your personal bank statements, a lease for the premises, contracts with suppliers, or any other documents that might help you make a better case.  Underwriters typically request any documents they may need.  If you are absolutely unable to provide a requested document, let them know, and ask if there is another document you can substitute.

If you are trying to change merchant account providers, then you have another potential ace up your sleeve: your processing history. If you have at least 3 months of processing statements which show that you have very few or no chargebacks, you are much, much more likely to be approved. Three months of processing statements is enough for most businesses, but companies that have high risk products or services might be asked to present as much as a full year’s worth of statements.

Finally, with all of the documentation in hand, you may want to make your case with a cover letter. It does not have to be complex or too technical, but it should touch on two main points: a general description of your business, and anything that might not be in your application materials that you think may address the issue of how your company will mitigate any of the processor’s risks.

For more information about how to navigate the merchant account approval process, or to sign up for a merchant account, please call (888) 924-2743 or go to

Leave a Comment