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Merchant account underwriting

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Brief presentation from PaySimple that explores the world of underwriting for a merchant account.

Brief presentation from PaySimple that explores the world of underwriting for a merchant account.

Published in Business , Economy & Finance
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  • 1. Merchant account underwriting
    paysimple.com | follow @PaySimple | facebook.com/paysimple
  • 2. When reviewing an application, underwriters assess the risk associated with the applicant’s business
    “Referees of risk”
    www.paysimple.com | follow @PaySimple| facebook.com/paysimple
  • 3. What they’re considering
    Business type
    www.paysimple.com | follow @PaySimple| facebook.com/paysimple
  • 4. Industry
    Product / service offering
    Formation (sole prop, LLC, corporation, etc)
    Online vs. Brick & Mortar
    Business type
    www.paysimple.com | follow @PaySimple| facebook.com/paysimple
  • 5. What they’re considering
    Business type
    Years in business
    www.paysimple.com | follow @PaySimple| facebook.com/paysimple
  • 6. Years in business
    In the underwriter’s view, businesses with long tenures are more stable, so the risk of underwriting the account decreases over time
    www.paysimple.com | follow @PaySimple| facebook.com/paysimple
  • 7. What they’re considering
    Business type
    Years in business
    Chargeback history
    www.paysimple.com | follow @PaySimple| facebook.com/paysimple
  • 8. Chargeback history
    Extensive chargeback histories are a major red flag for underwriters
    If the seller doesn’t have funds available to reimburse the buyer, the underwriting bank is left responsible for the funds
    charge·back
    [chahrj-bak] noun.
    1. banking - the return of funds by a seller to a buyer's debit or credit card account
    www.paysimple.com | follow @PaySimple| facebook.com/paysimple
  • 9. What they’re considering
    Business type
    Years in business
    Chargeback history
    Billing policy
    www.paysimple.com | follow @PaySimple| facebook.com/paysimple
  • 10. Billing policy?
    www.paysimple.com | follow @PaySimple| facebook.com/paysimple
  • 11. Billing policy?
    After goods or services are rendered
    www.paysimple.com | follow @PaySimple| facebook.com/paysimple
  • 12. Billing policy?
    After goods or services are rendered
    Up to 30 days in advance
    www.paysimple.com | follow @PaySimple| facebook.com/paysimple
  • 13. Billing policy?
    After goods or services are rendered
    Up to 30 days in advance
    Far in advance
    www.paysimple.com | follow @PaySimple| facebook.com/paysimple
  • 14. What they’re considering
    Business type
    Years in business
    Chargeback history
    Billing policy
    Owner or signer credit score
    www.paysimple.com | follow @PaySimple| facebook.com/paysimple
  • 15. Owner/signer credit score
    Credit score carries a lot of weight in the merchant account underwriting process
    Sometimes, business financial statements can be reviewed in lieu of a credit check
    Businesses with multiple partnerscan apply with a different signerif the application is declined dueto credit score
    www.paysimple.com | follow @PaySimple| facebook.com/paysimple
  • 16. Here are some of the things they consider
    Business type
    Years in business
    Chargeback history
    Billing policy
    Owner or signer credit score
    Processing volumes requested
    www.paysimple.com | follow @PaySimple| facebook.com/paysimple
  • 17. Processing volumes requested
    All aspects of the application are weighed against the processing volumes requested
    Processing volumes indicate:
    Total dollar amount of funds processing
    Maximum single transaction amount
    It is common for new businesses to start with lower volumes at first in order to build aprocessing history
    www.paysimple.com | follow @PaySimple| facebook.com/paysimple
  • 18. Other alternatives
    Upfront reserves
    Holds
    Daily fee withdrawal
    www.paysimple.com | follow @PaySimple| facebook.com/paysimple
  • 19. Here are some of the things they consider
    Business type
    Years in business
    Chargeback history
    Billing policy
    Owner or signer credit score
    Processing volumes requested
    www.paysimple.com | follow @PaySimple| facebook.com/paysimple
  • 20. Thank you!
    www.paysimple.com | follow @PaySimple | facebook.com/paysimple