Tuesday, June 5, 2012

Businesses Unqualified for U.S. Merchant Processing Services

Businesses Unqualified for U.S. Merchant Processing ServicesNot all legally operating U.S. businesses can set up merchant processing services. The reason is that some business types are determined to be unacceptable because of the high risk involved. The determination on which industries are to be considers unqualified is made by individual credit card processing companies, under the guidelines of Visa and MasterCard. These qualifications are flexible, so an industry that may be acceptable to one processing bank may be unacceptable to another and vice versa.

When determining who should go on the list of business unqualified for merchant processing services, the biggest factor taken into account is the probability for generating chargebacks. The data for some industries show that chargeback rates have historically been way too high. However, you need to be aware that your chargebacks rates too will be closely monitored, even if you do get approved. If in any month your business reaches a chargeback rate of one percent or higher, your merchant processing services account will be suspended and, if you can't get them under control, eventually you will lose the ability to accept credit cards.

That being said and considering that processors make their lists on their own, if your business falls into one of the following categories, you will most certainly not be able to set up merchant processing services:
  • Any business engaged in illegal activity.
  • Lottery clubs.
  • Mail order brides and any international match-making services.
  • Medical benefits packages, including discount medical cards.
  • Marijuana dispensaries and all affiliated service types.
  • Merchants or principal owners listed on MATCH.
  • Merchants physically located outside the U.S.
  • Merchants engaged in any form of deceptive marketing practices including hidden disclosure, bogus claims and endorsements, pre-checked opt-in boxes and refund / cancellation avoidance.
  • Money services businesses.
  • Money transfer services.
  • Mortgage or loan modification.
  • Mortgage reduction services.
  • Multi level marketing or pyramid schemes where the primary objective is the solicitation of new distributors, rather than the sale of products or services.
  • Non-face-to-face sale of prescription drugs.
  • Non-face-to-face sale of tobacco products or any other smoking products, including e-cigarettes and smokeless cigarettes.
  • Non-face-to-face sale of firearms.
  • Quasi cash.
  • Replicas and / or counterfeit goods.
  • Substances designed to mimic illegal drugs, including herbal smoking blends and herbal incense.
  • Travel - outbound telemarketing.
  • Virtual currency that can be monetized, resold, converted, traded into physical or digital products and services outside the virtual world.
  • Illegal gambling.
  • Foreclosure protection and guarantees.
  • Extended warranty companies.
  • Debt consolidation or reduction services.
  • Drug paraphernalia of any form.
  • Cruise lines.

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