Denied: Why the bank has refused your merchant account application

Having an application for a merchant account rejected by your local bank can be a soul-destroying experience, especially if you have expended a great deal of time and effort on your application, and when your business operations are already in a high-risk sector, such as adult entertainment, travel services, online pharmacy, escort services, dating, telemarketing, high-volume or multilevel marketing.

If this happens to you, your next step depends on a number of independent factors, but whatever the specifics of your situation, it still undoubtedly useful to understand the reasons why your application has been rejected, both so that you can better deal with the set-back, and so that you are better informed and equipped to move on with your business. Please note we have a high acceptance rate for all types of merchants so please click here to get started.

Bank rules for accepting or rejecting account applications are numerous and complex, and several minor mistakes or inappropriate answers can easily mount up to rejection. It may be that you have only done a few small and easily righted things wrong, so it pays to examine just what your mistakes may have been. The basic types of mistake are outlined below.

Lack of documentation

It may be that you have failed to submit all the necessary documentation for your application to be successfully processed. Banks can require a vast number of documents to accompany any application, as well as complicated application forms requiring a great deal of information about the merchant, including details of the merchant's legal name, their DBA (Doing business as) name, their URL, and their contact details including email, address and telephone number. The most standard requirements for accompanying documentation include driving license, passport, proof of incorporation or business license, monthly processing statements, and monthly bank statements. If your company already has an online presence, then this entails further paperwork, including a BBB (Better Business Bureau) report for your DBA, Legal Name and URL, printed search results for your DBA, Legal Name, and URL, a printed list of your domains from, as well as print-outs from your website showing product descriptions and merchant policy.

Failure to supply any of the above documents may result in your application being denied, although it does depend on your specific situation. For banks, the lack of complete documentation can be taken as a sign of your company's inability to follow straightforward rules.

Better business bureau complaint record

For 80 years, the BBB has served as a consumer watchdog, handling disputes between consumers and merchants, and reporting its findings to the public. An independent non-profit organization, the BBB attempts to resolve disputes concerning consumer dissatisfaction with service provision, delayed refunds, non-payment of bills, overdue accounts, and other consumer worries, without recourse to the courts. They count among their members the vast majority of businesses dealing with the general public.

If a consumer complains to the BBB about your company, then you will be notified and informed of the details. At this point you should do whatever you can to rectify the problem, as failure to do so will undoubtedly cause difficulties for your business in the future, and records of unresolved disputes may well provoke banks to refuse your account application. The BBB is a neutral organization, and ensures that both consumer and merchant rights are respected when seeking a resolution to problems.

Record of Rip-offs

In this context, the term "rip-off" refers to overcharging for goods or services presented at a lower price. In other words, the customer agrees to purchase and receives the product they have requested, but the provider then charges them at a higher rate than was advertised. Evidence that you have been a victim of rip-offs is likely to damage banks' confidence in your ability to manage your business adequately. It is therefore always worth double checking prices and receipts, particularly for expensive items or services.


When you submit your application for a merchant account, the bank will thoroughly check that all the information you have provided is true and accurate. This entails contacting the main credit rating agencies (Experian, TransUnion, and Equifax), checking your record with the BBB, and possibly contacting your business partners to ensure you are telling the truth about the location and nature of your business. This may also entail contacting your landlord to check that you really do occupy the space you have claimed. They will also compare your claimed processing volumes with your monthly statements to check that they tally. In other words, banks go to great lengths to verify that the information you have supplied is genuine and accurate. For this reason, you, too, will have to make considerable efforts to ensure that you are telling the whole truth in your application.

Moving on

If you can establish with some certainty which of the mistakes listed above was the reason for your merchant account application being rejected, you will be better prepared to assess your next move. Hopefully, you will be able to learn from your errors, so that you will have more success in the future, whether it be with a new application to a different bank, opting to work through a merchant account provider, or trying to set up an offshore merchant account. If you can rectify your mistakes, all these options are still open for you.

Have a question? Feel free to Contact Us