merchant account application

It’s a common experience that merchants think they’ve been approved for a merchant account, only to find their application was rejected (or not even submitted). This is usually because the processor found you an unsuitable candidate.

Here are five reasons lenders may turn down your application for a merchant account.

5 Reasons Your Merchant Account Request Didn’t Make It

 1. You provided an inaccurate business description

If you are a small business, be sure to fill out your merchant account application correctly. Add all accurate contact information and a thorough product or service description.

If you do not provide this information, your bank may reject your application.

 2. You have bad credit

Many banks will not give new merchant accounts to businesses with bad credit, and that’s because they cannot afford to take on the risk that you will default on a loan or get into financial problems after accepting their services.

Therefore, you need good credit and no outstanding debts in your name to qualify for an account. Bad debt can include any unpaid bills related to credit cards, loans, or mortgages.

Some banks also look at other factors like how much you make annually and your industry.

 3. You run a high-risk venture

Some banks do not want to take any chances when approving merchant accounts for new businesses.

If they think your business poses a high risk, they may deny your application without further explanation. Other times, they ask for additional paperwork before making a final decision.

 4. Bad industry reputation

Bad industry reputation is the biggest reason banks reject many merchants.

If this happens, ensure your application includes a strong explanation of what makes your business stand out from the crowd and why customers should choose you over other merchants in its industry.

 5. Your business is in the TMF or MATCH blacklists

These two blacklists can really hurt your chances of getting approved for a merchant account. Each contains hundreds of thousands of businesses penalized by banks for violations like:

  • late payments,
  • nonpayment errors, or
  • customer disputes that haven’t been resolved yet (or ever).

If one of these lists applies to your company, be sure to resolve it before applying for a merchant account.


Most banks have strict restrictions on who they offer merchant accounts to. Some only accept businesses with a strong brand name and reputation, while others prefer businesses that have been operating for a long time.

If you don’t fit these criteria, your bank will likely deny you an account.


Bad industry reputation and poor credit are some reasons your merchant account application failed.