US-Based Merchant Account Eligibility

There are several business types that are prohibited from setting up US-based card payment processing accounts (merchant accounts). The decision on who exactly is to be included in this "black list" is made by the Credit Card Associations of Visa and MasterCard and is mandatory for all acquiring banks (also called acquirers or merchant banks), which are also their members, and for merchant services providers. What this means is that no US-based credit card payment processor is allowed to acquire transactions from blacklisted entities.

The biggest factor in determining whether a particular type of business should be prohibited from setting up a US-based card processing service is its chargeback-generation potential. In some industries, statistical data show that historically the chargeback levels are simply unacceptably high. It should be noted that, even when a merchant account service is established, chargeback levels are still closely monitored and, if they exceed 1% of the total volume for three consecutive months, you will lose your merchant account. The merchant services providers also get fined for high chargeback levels at their merchants, providing them with an additional incentive to strictly monitor these levels.

Applications from merchants engaged in the following activities will not be considered for US-based merchant accounts, without any exceptions:

• Any merchant engaged in illegal activity.
• Adult-oriented products or services (all media types: internet, telephone, printed material etc.).
• ECommerce and MO/TO pharmacies (where fulfillment of medication is performed with an Internet or telephone consultation, absent a physical visit with a physician).
• Re-importation of pharmaceuticals from foreign countries.
• Internet/MO/TO firearm or weapons sales (including ammunition).
• ECommerce and MO/TO cigarette tobacco sales.
• Occult materials.
• Online gambling.
• Lotteries, raffles, gambling.
• Escort services.
• Collection agencies engaged in the collection of noncollectable debt, as defined by the Credit Card Associations.
• Credit repair agencies.
• Sports forecasting or odds making.

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