Limit Your Risk
You’ve decided to move out of the realm of cash-only payments and are shopping around for the right card processor for you. There’s a lot of factors to keep in mind, and merchant account limits are one of them. Unfortunately, every business owner must follow their merchant account limits very strictly in order to not raise the risk level of their account with their payment processor. A high-risk company could be charged fees, have their funds held, and even lose their account if they’re not careful. So, let’s talk about the merchant account limits you need to be aware of.
Annual and Monthly Credit Card Volume
Your monthly and yearly sales might change drastically depending on the revenue trajectory of your business. That’s why it’s a good idea to over-estimate them when you fill out an application. This gives you some wiggle room during the peak holiday season, and room to grow your business without causing suspicion.
Average and Highest Transactions
Your merchant account limits will also include how much can be spent on one ticket. A ticket is typically just one sale, but if you are charging the same customer’s card within a 30-day window, it may as well be considered the same ticket by the processor. Some merchants try to skirt their high ticket limit by splitting the sale (ie. charge 50% today and 50% tomorrow). This doesn’t fool the processor as they have systems to identify that it was running on the same card in a short time period. Your payment processor wants to know your maximum sale amount because it will alert both of you of potential fraud attempts, and it will prevent an expensive chargeback dispute.
An average transaction amount is a helpful number for your payment processor to quote you a fair rate. It will indicate whether a fee for the percentage of the transaction or a fee for the type of card will be more affordable for your business. If you own a dollar store, it wouldn’t make sense for you to be charged a flat amount for every transaction. A small percentage of the small ticket would save you money.
Merchant Account Limits Can Limit Your Funds
With other processors, your funds will be held if you go over your merchant account limits, and sometimes without notification. At PayJunction, the premier payment processor we sell for, they won’t hold funds. Instead, then give you real-time alerts as you approach your limits so it gives you time to get approved for higher processing limits as you grow. Talk with us to ease the growing pains of a booming business. If you’re expecting a large surge, let your processor know in advance to expedite funding. Also, don’t hesitate to ask for an amendment to your monthly limits. At PayFrog, we’re all about open communication and making payment processing personalized for you. Has your processor ever held back your sales from funding because you went over your merchant account limits? Let us know in the comments section below! Visit us on our helpful website, and we’ll help you on your processing journey!