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Reasons for Using A Merchant Account.


  



A merchant account is a unique type of account that is established for a firm to accept and process credit cards orders after which the transaction goes through a series of complex stages. The funds are after that transferred through the merchant account and then deposited to the firms' checking account within 2-3 working days.


One of the most financially distressing things that can arise to a business is when the processing bank freezes its merchant account. If this happens, the firm is not able to access the account, and the funds are held or an unknown period. Therefore, the firm cannot access its income or any other new credit card transaction.


Suspected deceit is often the reason why a merchant service provider can put a hold on a merchant account. The main reasons for merchant account hold are; breaking term agreed upon in the merchant service agreement and suspicious processing behavior.


To create a merchant account, a firm must sign a merchant service agreement which outlines the rules, fees, and limitations concerning processing volume and average ticket size for a merchant account. If the firm breaks any of the provisions of the agreement, the processing bank can hold its merchant account or even terminate it.


The following are the common reasons why a merchant account can be held or terminated.


Using a merchant account to accept payments for other businesses. This type of activity is strictly forbidden and once discovered, it can lead to the account being frozen or even closed.


Accepting payment for undisclosed goods or services. During the application of the merchant account you describe the products, you will be selling, and anything outside the description will automatically disqualify your account.
Processing more than the declared processing volume and average ticket. The volume and the average ticket that was documented during the merchant account application should not exceed that in any given transaction such as with travel agents numbers.


Charge-backs are an important factor when it comes to merchant accounts, and excessive charge-backs are the leading causes of merchant account freezing. It is essential to be very strict in stopping charge-backs before they even occur.
Preventing account holds due to suspicious processing activities involves;
Contacting your processing bank risk department before running any unusually large transactions and informing your bank on any changes in your business that may affect your processing behavior


It is important to avoid merchant account hold or freeze at all cost as it often comes with a lot of additional costs which reduces the profitability of a firm and efficiency so click for more.


You may also take a look at http://www.huffingtonpost.com/john-rampton/a-merchants-breakdown-of-_b_13724802.html if you want to read/watch further.