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Merchants bank not happy to see over 20,000$ monthly sales
Is it the case with most merchant services?

 4:37 pm on Aug 26, 2004 (gmt 0)

Our merchant bank has a limit of 20,000$ of monthly volume. We get very close to this limit now and requested them to increase it to 30,000$.

They need a 10% security deposit of annual! projected volume to increase this limit. We had only 3 charge backs this year (out of 8000+ sales). So asking for a 10% security deposit sounds quite unfair.

Is it just our merchant bank? or is this 20,000 limit a common policy?



 4:54 pm on Aug 26, 2004 (gmt 0)

That looks like a common barrier and we ran into the same thing.
Found it much easier to set up a second merchant account and rotate processing between a couple of accounts.


 5:04 pm on Aug 26, 2004 (gmt 0)

Conard, Setting up two merchant accounts sounds like an intresting solution. But, that would mean two different payment gateways too. Our payment gateway (Verisign) can only work with one hard coded merchant bank.



 10:57 pm on Aug 26, 2004 (gmt 0)

An interesting solution suggested by Conard! :)

You might also want to shop around... use another offer as leverage with your current provider.


 9:49 pm on Aug 27, 2004 (gmt 0)

that sounds outragous. i'd shop around. the multiple is a great solution if you're stuck with them


 11:53 pm on Aug 27, 2004 (gmt 0)

It is very common for merchants to set a monthly limit. They are also not very fond when you have many accounts so keep it under your hat if possible.

Find a couple of merchants that use the same gateway and then have your programmer alter your cart or your batch transactions so that switching between the two is automatic.

I currently have a merchant account with no monthly limit (hint - look to the large banking systems for your merchant account). Before this merchant account I ran 3 accounts. I batch process my daily orders and programmed my system to handle the switching so I know it is possible.


 4:09 pm on Aug 31, 2004 (gmt 0)

Thanks for the feedback guys. We talked to the merchant bank again very very nicely and convinced them to up our limit to 30,000. :)


 4:34 am on Sep 2, 2004 (gmt 0)

What will you do when you reach 30K?

As far as I know, it's illegal to have 2 merchant accounts.

Best would be to open a new corporation once you reach near the limit.

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This way customers know who charged them, and you're not flagged by the bank doing too much volume.


 5:04 am on Sep 2, 2004 (gmt 0)

Switch between two merchant accounts? Start another corporation? Are you people freakin kidding me!?

Step 1: Haggle!. Never accept the first thing a merchant bank tells you, they are VERY flexible with everything from rates to limits - the only thing that can hold you back is your credit score.

Step 2: Shop around. If you're going to get a second merchant account, make it a replacement for your first one not an addition to. Wells Fargo is a great choice for anyone who wants to shop around, and uses the Authorize.Net gateway. They also don't hassle you about growth.

Step 3: After your transaction volume has increased, the next step is to start negotiating a better rate. Don't let them try to trick you into thinking they're doing you any favors by increasing your limit if you have a low charge-back volume. The more you make, the more they make, and remind them of that if you have to.

Above all, make sure the bank always knows that you are the one in control of the relationship, not them. Don't take their crap - there are plenty of banks that will be happy to have a 30,000 customer with only 3 charge-backs in a year. Let them know that you know this and understand how the process works and you're not going to smile and nod while they dish out B.S. The typical internet merchant is completely clueless as to how all of that stuff works, and many merchant banks prey on that.

I'm glad you were able to get them to do what you wanted - hopefully everyone else will read this post and stop bending over :)


 2:43 pm on Sep 2, 2004 (gmt 0)

Thanks digitalv. Your post gave me goosebumps!.

Hope more people will read this post and stop kissing thier merchant bank's azz while your good business is making thier paychecks.

And, while you are at it, ask for that rate revision!. It's amazing how flexiable they can be.


 3:35 am on Sep 3, 2004 (gmt 0)

My suggestion above is based on facts.

An associate in [undisclosed] industry did an ad blast before the holidays. Sales went up 30% within 2 months.

The bank (one of the greatest in the US, with lowest rates and best offers) freezed 50,000.00 for 3 months "to be sure there are no chargebacks". Credit score was excellent. He was best friend with the managers, knew everyone in the local branch, and nothing helped. There's a limit on how much the bank will risk for being your friend.


 2:15 pm on Sep 3, 2004 (gmt 0)

Johnnie, that sounds outrageous... With friends like those, who needs competitors?

Still, rather than creating new shell corporations and getting different merchant accounts, I think your friend should have ditched his bank. At some point we have to realize this is a power game, and a lot of us are losing out because we are intimidated.


 7:00 pm on Sep 4, 2004 (gmt 0)

An associate in [undisclosed] industry did an ad blast before the holidays. Sales went up 30% within 2 months.

The bank (one of the greatest in the US, with lowest rates and best offers) freezed 50,000.00 for 3 months "to be sure there are no chargebacks".

I would expect that ... the bank takes a huge risk when things like that happen. Remember, if there is a charge-back the merchant bank has to guarantee the funds to the credit card companies whether they are able to re-collect them from you or not. Online Holiday purchases are notorious for charge-backs because often times shipping delays cause customers to charge-back the purchase. That's why they have transaction limits. There is also a big difference between calling in advance for a volume increase and a huge blast out of nowhere that the merchant bank isn't expecting.

Starting another corporation, especially when the credit score and everything you said was true, isn't really a smart way to handle it. It also doesn't get you your money any faster - if the bank is holding it, they're still holding it.

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