Understanding Terminated Merchant Facilities and How They Impact Your Business

13 October 2023

Written by Libby James

Libby James is co-founder, director and an expert in all things merchant services. Libby is the go-to specialist for business with more complex requirements or businesses that are struggling to find a provider that will accept them. Libby is regularly cited in trade, national and international media.

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Terminated Merchant Accounts

What You Need to Know Introduction:

Having a clear understanding of terminated merchant facilities is crucial for any business owner. It’s important to know the implications of such an event and how it can impact your business. In this guide, we will provide you with comprehensive information on terminated merchant accounts, including the reasons behind their termination, the effects on your business, and how Merchant Advice Service (MAS) can assist you in navigating this challenging situation.

What are Terminated Merchant Accounts?

Terminated merchant facilities occur when a merchant account or payment gateway is closed or discontinued by the acquiring bank or payment processor. This action can be initiated due to various reasons, such as violation of the terms and conditions set forth by the provider, excessive chargebacks, or engagement in high-risk activities. It is essential to understand the factors that can lead to termination to ensure compliance and prevent future disruptions to your business.

Reasons for Terminated Merchant Facilities

Several factors can contribute to the termination of merchant facilities. Some common reasons include:

Breach of Terms and Conditions

Failure to adhere to the agreed-upon terms and conditions of your merchant account or payment gateway can result in its termination. It is crucial to carefully review and comply with the terms outlined by your provider.

Excessive Chargebacks

High chargeback ratios indicate potential issues with your products, services, or customer experience. Acquiring banks may terminate your merchant facilities if chargeback rates exceed the acceptable thresholds. Implementing measures to prevent chargebacks can help protect your merchant account.

Engagement in High-Risk Activities

Certain industries are considered high-risk due to an increased potential for fraud or legal complications. If your business operates in a high-risk sector, such as online gaming, adult entertainment, or cryptocurrency, you may face a higher risk of termination.

Non-Disclosure of Material Information

Failing to provide accurate and complete information about your business during the application process can result in the termination of your merchant facilities. It is essential to be transparent and forthcoming with your provider to avoid any future issues.

The Impact of Terminated Merchant Service Accounts

Experiencing the termination of your merchant facilities can have significant implications for your business.

Disruption of Payment Processing

When your merchant facilities are terminated, your ability to accept credit card payments or process transactions may be temporarily halted. This interruption can lead to revenue loss and hinder your customers’ purchasing experience.

Damage to Business Reputation

Terminated merchant facilities can raise concerns among potential customers and partners. It may be perceived as a red flag, affecting your business’s credibility and reputation. Rebuilding trust can be challenging, but it is not impossible.

Difficulty Finding Alternative Solutions

After termination, finding a new merchant account provider or payment gateway can be a complex task. Acquiring banks may consider your termination history, making it more challenging to secure a new account. Expert guidance can be invaluable during this process.

Financial Consequences

Depending on the circumstances, terminated merchant facilities can lead to financial penalties, such as fines or withheld funds. These repercussions can have a lasting impact on your business’s financial stability.

How Merchant Advice Service Can Help

Our team of experts is dedicated to assisting you throughout this process. Here’s how we can help:

Expert Guidance

Our knowledgeable advisors have extensive experience in the payments industry. We can provide you with tailored advice and guide you through the steps necessary to find alternative solutions.

Wide Network of Providers

We have established relationships with various merchant account providers and payment gateways, including those specialising in high-risk industries. We can leverage our connections to connect you with suitable alternatives for your business.

Compliance Assistance

We can review your business operations and help you implement measures to reduce chargebacks and maintain compliance with industry regulations. Our proactive approach aims to prevent future issues and protect your merchant account.

Negotiation and Advocacy

In cases where termination is unwarranted or unjust, our team can advocate on your behalf and negotiate with providers to find a resolution. We strive to protect your business’s best interests and minimise any negative impact.

For more information on how Merchant Advice Service can assist you with terminated merchant facilities, please visit our Terminated Merchant Facilities page.

Conclusion

Understanding terminated merchant facilities is crucial for any business owner, especially those added to the terminated merchant file (TMF) or flagged with a member alert to control high-risk merchants. Whether you’re dealing with higher processing fees, navigating card networks, or grappling with match list reason codes, the impact on your ability to process payments can be significant.

Merchant Advice Service offers a lifeline in these challenging times, providing expert guidance to help you comply with security rules and procedures and avoid being engaged in illegal transactions. With their wide network of high-risk processor options, they can help you find alternative solutions for payment cards and high-risk merchant accounts.

FAQs

Can terminated merchant facilities be reinstated?

In some cases, it is possible to reinstate terminated merchant accounts. However, the outcome depends on the specific circumstances and the willingness of the provider. Seeking professional assistance can increase your chances of successful reinstatement.

What should I do if my merchant facilities are terminated?

If your merchant facilities are terminated, it is crucial to act promptly. Contact Merchant Advice Service for guidance on finding alternative solutions, mitigating financial risks, and rebuilding your business’s reputation.

How can I prevent terminated merchant facilities?

To prevent terminated merchant facilities, ensure compliance with the terms and conditions of your merchant account or payment gateway. Implement measures to minimise chargebacks, be transparent with your provider, and consider seeking expert advice to stay informed about industry regulations.

Can I apply for a new merchant account after termination?

While it is possible to apply for a new merchant account after termination, the process can be more challenging due to your termination history. Working with Merchant Advice Service can increase your chances of securing a new account that meets your business’s needs.

How long does it take to find alternative solutions after termination?

The timeframe for finding alternative solutions depends on various factors, including the complexity of your business and the industry you operate in. Our team at Merchant Advice Service will work diligently to expedite the process and find viable options for your business.

What fees or penalties can I expect after terminated merchant facilities?

The fees or penalties associated with terminated merchant facilities can vary depending on your provider and the circumstances of the termination. It is crucial to review the terms and conditions of your agreement and seek professional advice to understand the potential financial consequences.

Can Merchant Advice Service help with high-risk industries?

Yes, Merchant Advice Service specialises in assisting businesses operating in high-risk industries. Our wide network of providers includes options suitable for such industries, and our advisors can guide you through the specific challenges associated with high-risk merchant facilities.

Is seeking professional assistance necessary after terminated merchant facilities?

While it is possible to navigate the process independently, seeking professional assistance can greatly benefit your business. Merchant Advice Service can provide expertise, industry connections, and personalised guidance to help you find the most suitable solutions for your specific situation. For more advice like this,, visit our blog page!