As someone who runs a small business, you may be concerned about your credit rating if you’re trying to open a merchant account. Particularly during the COVID-19 lockdown, businesses are prioritizing online transactions over face-to-face interactions, which can be riskier to the health of you, your employees, and your customers, and are prohibited by law in many locations. This means that it may be necessary for your business to adapt its online services to include credit card payment and other processing methods so that your customers can get their goods or services from home.
This means you may be wondering how to obtain a merchant account. If you have bad credit, this can affect your rates and your qualifications for an internet merchant account. Use this guide to try and make it easier on yourself and learn how to obtain a merchant account despite your bad credit.
How does my history affect my rate?
There are things in your financial history that it’s important to be aware of before you try to figure out how to obtain a merchant account. Since these factors can influence your rates, it’s a good idea to know your history.
For instance, a bankruptcy on your record within the last ten years may complicate your application for an internet merchant account. It’s not impossible to get one, however! Some merchant account providers will still want your business and will try to entice you with lower rates, knowing that other companies may not be so lenient.
A bad credit score even without a bankruptcy can also potentially affect the rates you’ll get for your internet merchant account. This is why it’s important to talk to your bank about the rates you’ll get with a new internet merchant account. If your business has especially high volume, this may help to offset any bad credit rating and enable you to receive a more favorable discount rate with your internet merchant account.
Calculating the discount rate
The “discount rate” is the percentage of each transaction you pay as a fee in exchange for being able to accept credit cards. Depending on the provider, poor credit scores or bankruptcies within the last ten years may increase your fees when you try to sign up for a merchant account.
By talking to your vendor you can figure out if you have any room to negotiate, which can vary depending upon your placement in your industry. For instance, if you’re a high-volume client, your merchant may work with you to get your business by lowering your discount rate.
This can work in the opposite direction if your business is in a high-risk industry, such as gambling. Merchants may not be as eager to work with you if you’re a riskier investment for them, which means that they may impose a higher discount rate.
Part of your research into your discount rates for your new internet merchant account should include how your history might affect your rates.
Because of the ongoing pandemic, online payment options for your customers are more important than ever, but it’s also important to make sure that the investment pays off.
To get a merchant account at the lowest possible rates, contact Charge.com by visiting the website or calling (888) 924-2743, so that you can learn your options and find the online payment processing methods that work for you.