Eligibility for US Merchant Accounts

Published 16 October, 2008, 3:18 pm

the Credit Card Networks of Visa and MasterCard prohibit some business types from establishing US-based merchant account services for accepting credit and debit card payments. The decision on who exactly is to be included in this “black list” is mandatory for all acquiring banks, which are also Visa and MasterCard members, and for merchant services providers. What this means is that no US merchant processing bank is allowed to acquire transactions from blacklisted organizations. The biggest factor in determining whether a particular type of business should be prohibited from setting up a US-based merchant account service is its chargeback-generation potential. In some industries, historical data show that the chargeback levels are simply unacceptably high. It should be noted that, even when a merchant account service is established, chargeback levels are still closely monitored and, if they exceed 1% of the total volume for three consecutive months, merchants will lose their merchant account. The merchant services providers also get fined for high chargeback levels at their merchants, providing them with an additional incentive to strictly monitor these levels. Merchant account applications from merchants engaged in the following activities will not be considered for US-based merchant accounts, without any exceptions: Any merchant engaged in illegal activity. Adult-oriented products or services (all media types: internet, telephone, printed material etc.). Online and MO/TO pharmacies (where fulfillment of medication is performed with an Internet or telephone consultation, absent a physical visit with a physician). Re-importation of pharmaceuticals from foreign countries. Online and MO/TO firearm or weapons sales (including ammunition). Online and MO/TO cigarette tobacco sales. Occult materials. Online gambling. Lotteries, raffles, gambling. Escort services. Collection agencies engaged in the collection of uncollectible debt, as defined by the Associations. Credit repair agencies. Sports forecasting or odds making.