On the other hand, I work with startups that don’t have a solid financial history. This makes it more difficult for startups in this situation to get approval (especially if your product carries a higher risk) to open a merchant bank account. The insurer is well aware that if the merchant receives a pile of chargebacks, it will be difficult for them to reimburse the funds to the cardholders. High risk merchant account providers who run startups would go out of their way to have a strong balance sheet, as that would be a major difference that could tip the scales in their favor when it comes to getting them approved. If a business has put in a lot of effort to be successful, it would not be very smart not to take advantage of the advantageous history built up over the years to obtain the best conditions of approval. Use your financial statements or be prepared to advance a safety reserve. You should present your most recent balance sheet, income statement, and any note from the accountant.
Note on startups: Don’t worry if you haven’t completed a year yet. If the trading volumes are low then you should be able to easily get approved (less money flowing through the account means less potential risk). If you are managing a startup that plans to do a high volume of transactions from launch, you are going to need to use the other tips presented below to maximize your chances. Some internet payment providers are more used to working with startups than others.
Your Payment Processing History
Another extremely important tool that you should take advantage of is a solid payment processing history. The more money that circulates in your business, and the less chargebacks, the stronger your application will be. The logic is simple: if you’ve successfully processed bank card payments in the past, then why should that change? It will not change. If you are able to do so, always provide statements that show your payment processing operations for at least 3 months. 6 months would be even better. If your transaction volumes are very high, or if you have a high risk product, submit statements for several years. It might be extra work, but will surely be worth it.
There is no such thing as a magic phrase or secret handshake that will make things easier for you with a payment processor. However, the most obvious strategy is also one of the most overlooked: Explaining what you do in simple, old-fashioned English with a cover letter.
Write the cover letter as if you are applying for a job, but this time you will be writing it on behalf of a company. Your goal is to address the important points the insurer will consider when considering your claim. It is certainly true that the job of the insurer is to protect the best interests of the payment processor. They will not approve requests that carry a risk of chargeback. However, most of them want to help your business succeed.