Factors Utilized in Determining Risk Profile of a Merchant Account

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Factors Utilized in Determining Risk Profile of a Merchant Account


There are many payment processors to choose from. The key is selecting the right payment processor

to afford you the best price and proper match. To do this, you want to first understand your risk to the

payment processor. Because most payment processors require a personal guarantee from the owner of

a small company, your personal credit is one of the factors that will determine the relative risk of your

merchant account. Additionally, a card present account will typically be seen as less

risk than a card not present account.

Next, we compare, the common items that determine the overall

risk of a merchant processing account.

Attribute Lower Risk Higher Risk Comments

Processing Method Card            Present Card Not Present Card present transactions represent less risk to the merchant processor

Average Ticket < $100               > $1,000 Larger tickets tend to be more prone to chargebacks

Processing limit <$25,000/mo > $50,000/mo Greater processing volumes must be underwritten more carefully

Forward liability 0 days >           30 days Delays between transaction and product delivery lead to buyer remorse Guarantor’s credit credit score

> 700 credit score < 650 Personal credit very important in evaluating small business merchant acct.

Age of business Bus. >                5 years old New business New businesses much more likely to go out of business

Capital Cash Reserves                Little or no reserves Chargebacks may deplete your cash on hand

Product/service                        Easy to explain Innovative bus. plan New bus. plan may be difficult for underwriter to grasp

Sales tactics                              passive aggressive Out bound telemarketing are among the most aggressive sales tactics


All else being equal, a riskier merchant account can expect to pay higher fees. Additionally, you should

expect the approval process to take longer and plan your application process accordingly.


Contact Merchant Zoom today and we’ll consult with you on your best options.


Headquartered in Pinole California, MerchantZoom, Inc. was founded by Wally Arakozie. Previously employed by one of the largest merchant processing companies here in California for nearly a decade. Since the company’s beginnings MerchantZoom, has grown into a reputable national merchant provider.  Along with delivering state of the art technology and competitive rates, MerchantZoom, thrives on personalized local customer service and support. In order for your business to ZOOM!



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Content Release Date May 1, 2017 – MerchantZoom Inc.

Press Release by 72 Charms LLC, content is the responsibility of MerchantZoom, 72 Charms simply does it’s work for hire, contact us if you need to promote your business, otherwise, contact, MerchantZoom at http://mchzoom.com to take care of your processing needs.    If you need social media content management or WordPress design reach out us at www.72charms.com

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