Merchant Account Terms...

[Bubzeebub]

I'm working with a merchant account provider who will remain nameless. All I'll say is that they're one of the more popular providers. One clause in their contract states that you need to note your monthly sales volume and average sales per transaction. It also states that if you EXCEED the sales dollar amount you project that your service could be terminated or your rates increased! Has anyone ever heard of such a practice and how do you combat it?

[Bubzeebub]

On top of this, there's a part of the contract that says you must ONLY use them as your merchant account provider!

[Bubzeebub]

Why is it that so many people are posting here about their site yet won't make a brief comment about merchant account provider terms?

[upside]

If you are concerned with exceeding the monthly volume with one merchant account you could get a second account and split your transactions between the two.

<added>
Ouch! Just realized that you have to use them exclusively. So you could ask for your limits to be increased or find another provider.
</added>

[Bubzeebub]

Yeah..it's rough. Basically the merchant account providers have drawn up a BULLET PROOF contract!

[Phillyrich]

Bubzeebub, generally if you do not exceed your volume cap within the first 3 months you can have them raise it. Your cap is based upon your credit and financials, if you get some history with the processor they will raise the cap.

[brandyace]

Another good reason to read your contracts closely before signing.

Merchant account providers want to know your average ticket and volume processing in order to determine risk. If you go substantially over, the account is automatically flagged as a potential fraud.

How much over is dependent upon your provider. We generally let accounts double in size per month. Other providers have different criteria.

The most important thing is for you to notify the provider if you anticipate higher volumes/tickets. For example, if you are doing an ad campaign that will bring in a large # of sales. Oftentimes, they will work with you. But, depending on who it is, they can also pull some pretty crazy stunts with your money.

btw, you can have more than one merchant account. The card associations and merchant account providers don't like it, but it's still somewhat of a free country.