Consider Your Industry
Your industry plays a huge role in your ability to open a merchant account with certain companies. If you’re thinking of one of the larger credit card processing companies like Stripe or Square, you’ll have to make sure your industry isn’t listed on their Prohibited Goods and Services list’ some industries appear on this list due to certain regulatory laws and others simply because they are deemed high risk industries. If your industry matches one on those lists and you set up a merchant account with the company anyway, you run the risk of your account being closed and your revenue being held by the processor.
What to do if You’re Considered High-Risk
Instead, opt for a credit card processing service that caters to your industry. Oftentimes these companies will have slightly higher processing fees, however they are designed for higher-risk industries and therefor won’t be as strict with their criteria which means you’ll be less at risk of your account being closed.
Having a Merchant Account Closed
You don’t want to run the risk of having your account closed, deposits held, and potentially burning a bridge with other processing companies! Having a merchant account shut down can result in your company being listed on the MATCH list (previously referred to as the TMF or “Terminated Merchant File”) which is a list of companies that carry an “unacceptable level of risk”. Other merchant providers can access this list which can make it extremely difficult or even impossible to set up an account with another provider once you’ve had an account closed.
Summary
Make sure to establish a merchant account with a provider that caters to the risk level of your company. Low processing fees can be tempting, however if your industry is considered high-risk to merchants they either will not open an account for you at all or can close it at the first sign of instability. Instead, work with a merchant service provider that understands your business and maintain good business practices is relation to processing payments.
