Handling the Closure of a Merchant Account

Sunday, June 11, 2017
  • In a perfect world, every business would be profitable and only close when a happy owner decided to retire. 
  • In a perfect world, every ownership change would simply be a transfer of vendors to the next owner. 
  • In a perfect world, every merchant services provider would help new business owners honor their agreement with a previous processor.
  • And, in a perfect world, every merchant would fulfill the terms of their merchant agreements.
Unfortunately, we do not live in a perfect world; businesses close unexpectedly, ownership changes can be riddled with challenges, very few merchant services providers take the time to find out what a previous processor's terms are and quite a few merchants do not hold up their end of the agreements they sign.  Here are a few tips to help the transition from one merchant provider to another go more smoothly and a few tips for ownership and business changes!  It is our hope that these tips can save business owners unnecessary frustration and expenses while encouraging those in the merchant services industry to conduct themselves with honor and integrity! 
READ AGREEMENTS BEFORE SIGNING THEM  Many business owners do not read the terms of the merchant agreements they sign and while it would be wonderful if every sales person were a person of their word, we have to remember we do not live in a perfect world.  Trust but verify!  Read your agreement before signing it.
CONTACT YOUR PROCESSOR IMMEDIATELY TO ALERT OF ANY BUSINESS CHANGES  Entity or ownership changes can run pretty smoothly but it definitely pays to contact your merchant services provider to let them know beforehand.  In a perfect world, the new ownership would simply enter into an agreement with the existing processor however that does not always happen and you would not want to be stuck paying any fees by not giving proper notice before your business changes.
CALL YOUR PROCESSOR BEFORE MAKING ANY CHANGES TO YOUR MERCHANT ACCOUNT  Many times, a business owner might forget what the terms of the agreement were and there might be auto-renewing agreements or required notices that must be given in order to prevent any termination fees.  A quick call to your processor will clearly identify the proper way to close the account and minimize any fees.
RECONSIDER DOING BUSINESS WITH A MERCHANT SERVICES PROVIDER WHO DOES NOT ENCOURAGE YOU TO FULFILL YOUR OBLIGATIONS  If a sales person truly cares about your business, they will do some PRE work before signing you up for a new merchant account.  Sales people who go right into signing you up without regard for any fees you might have to pay to the previous processor do not have  your best interest at heart and will not be a good long term fit for  your business. (If they don't care if you have to pay cancellation fees- why would they care that the rates and fees they have promised are accurate?)
We NEVER like to lose a merchant relationship but we are dedicated to minimizing cancellation fees and helping our merchants (past, present and future) keep as much of their money as possible!  And NO- We DO NOT live in a perfect world but making sure you are holding up your end of any agreements you sign and REQUIRING a high level of service will definitely help reduce frustration and increase your bottom line! 
Cheri Perry 6/11/2017

Add your comments:

Items in bold indicate required information.