Challenges of Startup Merchants

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Merchant services companies, located in the US often reject merchant account applications, coming from small-size startup merchants, coming from other countries. MSPs are reluctant to deal with them because of several reasons.

First, if a company is processing transaction volumes, which look insignificant to a US MSP, the MSP will not take the risk of underwriting such a company, because the MSP’s payment for that risk is too low. For instance, if a startup merchant processes $7000 worth of transaction monthly, the MSP gets only $70 to $100 in revenues.

Second, if a startup merchant is coming from a country, which is considered a high-risk location by MSPs and PSPs, they might also be reluctant to grant him a merchant account, because they get almost no control and plenty of liability if something goes wrong.

Finally, if a startup merchant is involved in some high-risk business, such as outsourced software development, tech-support, or (which is even more risky) gambling, porn, where chargeback rates are high, the MSP is reluctant to underwrite such a merchant and, potentially, deal with the chargebacks, issued by his customers.

 In our article on #Paylosophy you can find more detailed information on why merchant account applications coming from startup merchants often get declined.

Summary
Challenges of Startup Merchants
Article Name
Challenges of Startup Merchants
Description
If you are a startup merchant, you can face some challenges trying to get a merchant account. Read this article to learn how you can avoid them.
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United Thinkers LLC
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Challenges of Startup Merchants обновлено: September 10, 2018 автором: Katherine Pensatori

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