Getting an Online Merchant Account with Bad Credit: A Brief Guide

Accepting credit or debit card payments from customers requires an online merchant account. The coronavirus outbreak has moved many common transactions, which previously would have been conducted in person, to online stores where eCommerce is the main way retailers and service providers interact with their customers.

Online merchant accounts connect the bank of the customer with that of the retailer. Any fees that may be involved will be the main concern of many retailers that plan to get an online merchant account. Since customers increasingly expect businesses to have an online component, anything that increases any fees associated with a merchant account should be fully understood before the account is obtained.

This is why retailers who have bad credit may wish to familiarize themselves with this brief guide prior to signing up for their online merchant account.

How to open a merchant account

When wondering how to open a merchant account with bad credit, it cab be helpful to know how merchant accounts work. The merchant account provider takes a risk on businesses by processing and settling their payments for a fee. The risk refers to whether the transactions will result in a chargeback. If that happens, and if the business can’t or won’t come up with the money to refund the customer’s payment, the processor has to cover that cost.

One factor that will determine whether a business is considered risky is the credit score of the business and its principals. A bad credit score could suggest that the retailer may be less likely to make payments.

When financial history can affect accounts

Bad credit certainly isn’t the only thing that may make it more difficult for a retailer to obtain an online merchant account. A bankruptcy can also affect this, possibly causing the merchant to pay higher rates. The “trick” is finding a merchant account provider that will work with someone who has bad credit without hiking rates.

The software and services provided by online merchant accounts may be crucial for today’s online marketplace, but retailers are necessary to the account providers’ business as well. They want to work with high-volume clients, so it doesn’t hurt to ask about products and services, even if a bad credit score is looming over the negotiations.

The Takeaway

A bankruptcy or a bad credit score can make it more difficult for retailers to open a merchant account. It’s important to find a merchant account provider that offers flexible services and who will work with retailers regardless of their financial history.

Visit or call (888) 924-2743 to see options for products and merchant account services, even if a low credit score has affected the availability of these services from other providers.

Leave a Comment