Yes and no. Although merchant card service providers offer different terms and conditions, on approval of a new merchant account most accounts will have a set processing limit that will be based on information provided by you on application. The terms and conditions of the merchant account will be standard. The limit may be conservative to start off with because you may have to build up a reliable and predictable history of good business practices and increased valid credit card transactions before you are eligible for any increases or change in terms and conditions. At the same time, some accounts may also have minimum processing requirements.
No matter the size or type of business you run, the processing limit and terms will depend upon statistical factors until you have established trust with the merchant card service provider. If you reliably process card payments over a period of time and there are few chargebacks (card payments returned as fraudulent), then you begin to build a solid history with the merchant card service provider.
Why are processing limits sometimes conservative to start with?
Conservative maximum processing limits are sometimes put in place because credit card fraud is rife! This is done to protect the merchant card service provider and their partnering bank. There are ‘companies’ that apply for merchant accounts and appear to be ethical and legal, but behind the scenes they are run by fraudsters processing stolen credit card transactions. Once chargebacks start being issued, the merchant card service provider sometimes finds that they have closed shop and vanished into thin air!
Another reason is that some merchant account applications are fronts for undesirable industries that would not be approved for a merchant account under the same terms if they revealed their true business type when they applied. Some high-risk industries can include pornographic websites, online gambling, sellers of guns and ammunition, recurring billing products and many more. If the merchant account holder is identified as a front, the account will typically be closed.
It’s all about building trust with your merchant card service provider.
If you exceed your processing limit, most merchant card service providers will allow the transactions to go through if the trust relationship is there. This is the time for you to approach your merchant card service provider and ask for a processing limit increase. Discuss the increase in your sales volume and that you are encouraging card payments as opposed to cash or check. Your processing limit will most likely be increased.
There may be additional benefits to you for an increased volume of valid card transactions depending on what the merchant card service provider’s terms are. In the end merchant card service providers are businesses just like yours, and all businesses strive for increased revenue. The more valid card payments you process, the more sales you are making. The more sales that are paid for by card to validate an increase in your processing limit means that both you and your merchant card service provider earn more revenue. That’s what both of you want; a win-win situation!
For more information about whether and how the sales volume of your business processes may play a role in the type of merchant account you get or to sign up for a merchant account, please call (888) 924-2743 or go to Charge.com.