Underwriting

Merchant Account Underwriting is the process merchant account providers use to evaluate a businesses potential for risk.

The purpose is to allow a merchant account provider to get comfortable with your business model, so they can make an appropriate determination about whether to work with you or not - because remember: if your business goes under all of the liability for people who request refunds, or chargeback purchases, will fall onto the merchant account provider.

Merchant Account Underwriting Overview

Underwriting is a critical part to setting up a merchant account. The more a merchant account provider understands about the merchant's business model and how their business works, the less likely they will be to close their merchant account in the future.

Merchant account providers look for 3 main things during the underwriting process:

1. Personal history
2. Business history
3. Business model

Personal History

Personal history primarily refers to your personal credit history. However, it will also encompass looking at you personally from the lens of "how likely is this person to commit fraud?".

Business History

If your business is not brand new, the underwriter will typically begin by looking at 3-6 months of your past credit card processing statements.