One of the most challenging administrative tasks associated with running a small business is processing payments from your customers. A separate business account is needed to help small businesses track their finances, but processing limits on new business accounts can be restrictive.
If you are hoping to gain access to a high-volume merchant account, there are some simple steps that you can take to help convince your financial institution to increase your processing limit in the future.
1. Minimize Chargebacks
One of the biggest obstacles you will face when trying to secure a high-volume merchant account is chargebacks. A chargeback occurs when a customer disputes a charge and their financial institution reverses the purchase.
Multiple chargebacks can raise a red flag for financial institutions that work with small businesses.
Too many chargebacks will flag your business as a high-risk partner, which will limit the amount of money your bank or credit union is willing to process through your account each year.
2. Create a Shipping Protocol
Slow shipping is one of the reasons that a customer might request a chargeback. Financial institutions will usually evaluate your shipping protocol when trying to determine if you qualify for a high-volume merchant account.
Take the time to establish a strict protocol that includes shipping items quickly from your own inventory to minimize errors. By fulfilling orders yourself and reducing the amount of time it takes for your customers to receive their orders, you can prove to your bank or credit union that your business is trustworthy.
This increased trust will translate into a higher processing limit over time.
3. Authorize a Safety Net
If your merchant services provider is hesitant to increase your processing limit, you can offer to authorize a safety net to help cover unexpected chargebacks.
Since a merchant services provider stands to lose money whenever a customer initiates a chargeback, you can authorize the provider to hold back a percentage of your sales. This safety net can be held in a trust account to be used for chargebacks.
After a certain amount of time elapses, money from the safety account can be released to your company.
By authorizing a safety net for your financial institution, you can reduce the amount of risk associated with an increase in your merchant processing limits.
Work with your merchant account representative to establish a proven track record that will allow your small business to access a high-volume merchant account in the future.
For more information, contact a high-volume merchant service today.