Open A Bad Credit Merchant Account
Bad credit history is a fairly common problem among many US and EU companies. This term means that the organization previously had problems meeting its obligations to banks or other lenders. Information about the credit history is stored, and before the provision of certain financial services, banks refer to it. If the credit history is bad, the company may face difficulties in opening a merchant account. If it’s your case, you need to choose a provider that is ready to open a merchant account for bad credit companies.
Features of bad credit merchants
Companies can be classified as organizations with bad credit histories for several reasons. The main ones are the following:
- Overdue loans.
- Low credit score.
- Unredeemed loans that were written off due to the statute of limitations.
- There has been a bankruptcy in the history of the company.
- Unsettled debt litigation.
Another reason a company might be included in the bad credit category is its erratic income. In this case, cooperation with the organization is also considered very risky.
Bad credit companies are classified as high-risk. Banks impose restrictions on such companies, and they may encounter difficulties in obtaining various banking services.
Another reason a company can fall into the bad credit category is the high percentage of chargebacks. Each initiated chargeback is an additional cost for merchants and payment processors. Banks do not want to cooperate with companies that can bring them additional headaches.
Why do bad credit companies need a merchant account?
A merchant account allows you to accept payments from clients at any time, regardless of when the acquiring bank is open. Having a merchant account is a must for any company providing services or goods to its customers. You can receive money in your merchant account anytime – at night, on weekends, holidays, etc. If your company is considered high-risk (including cases when it has bad credit history), you need a specific bad credit merchant account since if you apply for a regular merchant account, you’ll get a refusal.
Risk factors for bad credit companies
Bad credit companies regularly face risks in the course of doing business. The main ones are the following:
- Refusal to open an account due to bad credit history.
- Freezing of funds in the account to redeem the debt.
- Increased requirements for supervision of the account and activities of the company with the possibility of setting additional limits.
Banks are often reluctant to work with bad credit companies because it is a big risk to their reputation. Therefore, if you have a bad credit history, you will need to open a special high-risk merchant account for bad credit.
How to get a merchant account with bad credit
SegoPAY offers bad credit companies a convenient payment solution. Using our services, you can open a merchant account with no credit check. We cooperate with companies that belong to the high-risk category and offer affordable commissions and many services, including payment gateways, intelligent routing, and cascading, anti-fraud systems, etc. Contact us to learn more about our offer for bad credit companies.