6 Tips for Writing a Cover Letter for a Merchant Account Application

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Writing a good cover letter is all about balance. First, ask your sales representative for advice. This is important because each bank or online credit card payment solution has a different way of assessing risk for different industries. The sales people you talk to could give you valuable advice. Also, remember that insurers are real people, and they can be reinsured and influenced like everyone else. Showcase your major assets. If your service involves high risk or is complicated, it is essential that you prepare a short, carefully written summary and a clear cover letter that highlights your strengths. Try to cover any questions that might arise, and answer all of these potential questions in advance. If you do this, these questions will not create doubts, and will never turn into concerns. This is the trickiest way to get out of it.For more suggestions; here are some points that should always be addressed in the cover letter:

  1. Consider the Specific Risk of Your Product in Your Industry

Weapons and ammunition. Enriched uranium. The ivory tusks of endangered elephants. If you are selling any of these products, your cover letter will need to be written in magic ink. Some payment providers will reimburse you for the setup fee if your request is rejected, which you can then pay to pay your deposit after being arrested! In fact, those products would certainly be on the banned list that is maintained by Visa and MasterCard. You just won’t get approval for some products. Let’s focus on selling products and services that will not cause your arrest. High risk accounts often require a specialized payment solution. In the high risk category, the discount rates are very high and the safety reserves are very large. In short, you’d better find a provider of Shopify Payment Gateways  that specializes in this type of industry. Two examples of high risk accounts when it comes to getting a merchant account are: Pornography / adult content, online betting. For some other businesses with less risky activities than these, but still involving considerable risk, the application is often approved if the necessary efforts are made. Businesses should use each of the tips presented in this article to get their application approved. Some examples of moderate risk activities:

Travel packages, airline tickets, and accommodation Telephone services (especially long distance calling and telephone cards)

Network marketing

Group buying sites

Auction sites

Subscriptions at reduced prices

Gym memberships

If we go one step further down the risk ladder, we find low risk claims, which are often B2B and B2C products and services. I think most Shopify ecommerce store owners fall into the low risk category. Talk to your sales rep at the payment solution provider you’re interested in, and ask if the service or type of product you provide is generally supported. Knowing what to expect ahead of time will give you time to write a great cover letter if you feel you need it.

2. Highlight your Strengths

Sing your praises and don’t be shy when it comes to providing relevant and factual information. Remember, however, to stick to the facts, not to get carried away. You might want to tell the insurer that you have an IQ of 160, that you can cook a pretty good omelet, and that you can lift 150 kg. Your room for maneuver is narrow. Keep it short, because if your letter is too long, the insurer may not read it in its entirety, and if you write it in a whimsical way, you will lose credibility. Stay focused on the essentials by talking about directors, leaders, or people involved in the project that bolster your credibility. For example, if you sell a book you wrote, and your publisher is also working on Stephen King books, it would be very useful to mention it. Everything that relates to your industry and the experience you have gathered should be mentioned. If you know your product is affiliated with a higher risk industry then you should ask yourself if there are any aspects that differentiate your business from the competition. Do you have policies in place to prevent fraud? Are you offering a revolutionary product that is far superior to your competitors’ products? If there are such elements, add them while remaining factual and concise.

3. How to Address the High Volume of Transactions Issue

The transaction volumes directly impact the potential risk of the payment solution provider, as there is more money flowing through the account. If your transaction volume is high, you should report to the insurer that you have a solid transaction processing history. If you are a startup and your transaction processing history is not strong, then show the insurer what makes your business unique and will allow you to record high volumes of transactions from the start. You should validate the request by providing logical reasons as to why your business will be able to meet the goals it has set for itself, and ensure that you demonstrate that you are able to fulfill orders to run the business. Smoothly.

4. How to Address the Question of as Long Commands Processing Times

Order processing time refers to the amount of time that passes between the time a payment is collected and the time the product or service is delivered. For example, if you sell baseball gloves online, the order processing time could be a week, since if you ship the gloves immediately, the customer will receive the product within a week. If you are selling vacation packages, the order processing time will be much longer (around 60-90 days) since most people book vacations 2-3 months in advance. You should keep in mind that the longer the time between the date of sale and the date the order is completed, the higher the level of risk. Subscriptions are always directly affected by processing time. Anytime you buy something with an expiration date (like a website subscription access) the risk level tends to be higher. Ideally, you should build your business in a way that controls or limits the risk of order processing time. In most cases, you will have no control over this aspect, as external factors will dictate how you should operate. This leads to a very important consideration: in some cases, you might find that your business is high risk, and that a refusal is a real possibility (especially if it is a young business with no financial budget). If you find yourself in this situation, sometimes it is better to modify your business model in order to reduce the order processing time or subscription period, since this will reduce the level of risk. Addressing this topic in your cover letter can make a significant difference. This could mean the difference between a denial and a discussion with the insurer about approving your claim.

5. Are you open to the Idea of ​​Providing a Safety Reserve?

Some people think it is crazy to tell the insurer that you are willing to put up a safety reserve. This is bad reasoning, since the insurer will have to raise this point, especially if the level of risk is high. So it’s best to act proactively whenever you get the chance. When in doubt, here’s what to say: “I realize that the industry could historically be viewed as risky. If more security is needed, we are prepared to look into the situation if necessary. This adds a sense of determination regarding the request. You won’t waste the insurer’s time and you will work with the potential provider of your payment solution to find mutually acceptable terms of approval.

6. Bad Credit Score

If you’ve had chargeback issues before, or have bad credit, you need to be upfront about it. It shows the insurer that you are an honest person and that you are willing to work together to resolve any issues that may be of concern to the insurer.

What if My Merchant Account is denied?

What should you do if you have done everything correctly and your request has been refused? First and foremost, remember that some payment processors are more forgiving than others. Refusals can be resolved. If you received a denial, you should consider responding to the following: “Thank you for taking the time to review our request. I have some knowledge regarding how risk is analyzed in the traders industry and I think I know why our request could not be taken care of. In order to be as rigorous as possible, I would like to reiterate that we are sincerely interested in using your service, and that we take this project very seriously. If there is anything we can provide including back-up security or cash collateral, we would be happy to look into that. We are fully dedicated to our business and are willing to provide security guarantees or anything else that may be required to obtain approval. If there is anything we can provide for the approval of our request, please let me know, we really want to work with your organization. “digital marketing perspective, the template above is a template that should be modified to suit your situation. Through this message, you convey the feeling of wanting to work with them. I’ve noticed that the more willing a trader is to sit at the table to have a frank discussion about security, the less security ends up being necessary. I think this is because you are showing the insurer that you are serious about your business and that you are willing to put the money in it.

I Tried Everything but My Request Was Not Granted

Keep in mind that different banks and payment solutions have different risk appetites. For example, travel is historically considered a high-risk industry, but some payment solutions specialize in travel accounts and can provide them quite easily. The payment solutions provider you have chosen may not be right for your business. Another example: At the moment bundle deal websites are very popular, but there aren’t many banks that will accept these accounts. You may have to do extensive research to be able to find the right payment solution provider. It would also be helpful to work with an agent who represents multiple banks, as they could save you effort and find out which payment solution providers will have an appetite for your type of business.

What if Everything Fails?

In almost all situations, a “deny” actually means “refused for now, but come back to us once your history is stronger.” Some payment solution providers specialize in high risk accounts. I encourage you to use caution when using these types of payment solutions. Be careful before embarking on this path. High risk payment solutions, which are often located offshore, will charge fees that are often much higher than low risk payment solutions. In some situations, you might not have other options. If you’re using a high-risk payment solution, make sure your hands aren’t tied by a contract. After 6 months to one year of successful transaction processing history, I realize that you can’t have a transaction processing history if you don’t get approval. Some businesses need to start with a high-risk payment solution provider, with the goal of building a solid long-term history, and then moving to a low-risk payment solution. One final note about this strategy: do everything you can to avoid chargebacks if you go down this path. You need to make sure that your transaction processing history is perfect when you try to resubmit your application a year later.