Opting for Third Party Processors-Reasons

As a business merchant you have to cater to the preferences of your customers to survive in the business. As a result of this you will have to accept credit card payments since th customers prefer this mode of payment due to its convenience and comfort. In order to accept credit card payments you need to open a merchant account. But due to some reasons you may not be able to open a true merchant account and under such circumstances you may opt for third party processor. To get the merchant account you certain conditions have to be satisfied. Non compliance of those conditions will lead to rejection of your application for true merchant account. Following are the reasons for not getting a merchant account and thus you will go for third party processors.

In order to be eligible to accept all the major credit cards like visa, master or American express your business must be registered. Only those business which are legally registered will be sanctioned a true merchant account and this account cannot be used to process your personal transactions. If your name appears in the Terminated Merchant File then you will not get a true merchant account. Before accepting credit card, make sure that you have cleared your name in the black list if at all it appears in it. If your name has been appeared in the file then rectify the reasons for it.


Nature of business is to be considered while accepting credit card payments. Some business will naturally be very risky and also their online payment process will not be fool proof. All these will lead to rejection of your true merchant account. Because of the risky nature of your business and also due to the frauds that are possible to be committed in your business getting a true merchant account is truly difficult. Such high risk business will get third party processors without paying higher charges.


When you have decided to accept credit card payment and apply for merchant account a complete credit check of your business will be done by the provider. If you don’t have any business credit then your personal credit will be verified. Some small business merchants may not have the required credit and thus getting a merchant account becomes difficult. Generally third party processors will not conduct any kind of credit checks.



True merchant accounts attract high fees and monthly charges. To make it beneficial you will have to do large volume of sales. Only then paying these charges will be justifiable. If you are a small business and volume of sales is less then you may not afford to pay such high fees. As a result of this your saving and profit will decline. In that case you can opt for third party processor which does not charge such high fees. Moreover for initial setting up you may have to spend a lot for programming online forms etc in case of true merchant account. All these can be avoided in third party processor as only simple programs will be included in your website and the rest will be looked after by the provider.


The difficulty and the tedious process in getting the true merchant account especially for small business have led to the existence of third party processors.





The author is specialised in providing merchant processing and payment processing services. To know more abouttake credit cards and payment processing visit unibulmerchantservices.com