MerchACT is committed to providing you with fast, friendly and reliable customer service. These FAQs are designed to provide a better understanding of how MerchACT works, from the basic information up to the fairly complex topics. If you have questions that are left uncovered here or elsewhere in our website, please contact us and let us know.

What is MerchAct

We provide merchant accounts to ecommerce businesses located anywhere in the world. We tend to focus on higher risk businesses that would not be approved by every bank such as dating subscription sites, call centers, mlm, bitcoin products and so on.

What is the best way to contact you?

Please get in touch with us, leave us an email or reach us through our Contact Us page.

How do I get in touch about potential partnerships?

Please get in touch with us and leave your contact information at our Partnerships page.

What is a Merchant Account?

A merchant account is a type of bank account that allows businesses to accept and process payments from credit cards, debit cards, gift cards and electronic check (e-check) transactions. A merchant account is based upon an agreement between the merchant (acceptor) and a merchant acquiring bank (and sometimes a payment processor) that enables the settlement of payment card transactions. The agreement stipulates that the merchant agrees to abide by the operating regulations that have been established by the card brands, like Visa and MasterCard.

When a customer makes a purchase with a credit or debit card, the funds are transferred to the merchant account where settlement occurs. The merchant is responsible for the transactions that take place within their account and must abide by the terms of service provided by the merchant acquiring bank.   Merchants typically pay fees to have merchant accounts, and these fees fall into categories: transaction fees, discount rate and monthly fees.

A merchant account is essential for online businesses, where a majority of orders are made with a credit or debit card. For many businesses, obtaining a high volume merchant account is essential to optimize all potential revenue streams. In some cases, merchant account providers do not cater to the high volume merchant segment and take a substantial cut of profits to hedge against future returns. This is especially true for high risk merchants. In other cases, merchant accounts cannot support large increases in monthly volume and will terminate a merchant account if there is a spike in volume. Since almost all merchant account contracts explicitly state a volume limit, merchants find themselves between a rock and a hard place. Either their potential growth is hampered by that preset limitation or they exceed the limit and find out that their merchant account will be shut down.

Merchant account providers like MerchACT offer high volume merchant accounts that enable faster funding times, flexible underwriting, lower rates and pricing, fraud and risk management and a variety of banking relationships to facilitate business needs.

What is a Payment Gateway?

A payment gateway is a portal offered by a merchant service provider that enables the authorization of credit or debit card payments for e-commerce stores, online retailers, brick and mortar stores and hybrid “brick and click” retailers. The payment gateway transfers information between the online payment portal (often, a website or mobile device) and the payment processor or acquiring bank.

A reliable, flexible and robust payment gateway is essential for businesses owners who want to sell products and services online. Some considerations merchants should keep in mind when selecting a payment gateway include:

– The ability to accept all major credit and debit cards as well as ACH payments via secure account verification

– Multi-currency processing capabilities to cater to customers around the globe

– Account management features to streamline business operations, including reports, batching, returns and voids.

– Security features to protect sensitive customer data and maintain PCI compliance

– A suite of fraud prevention and risk mitigation tools for enhanced protection

An online payment gateway enables e-commerce merchants to provide 24/7 global access to customers wishing to purchase a service or product. This facilitates expansion beyond the walls of a brick-and-mortar store and offers a way to increase profits and take advantage of customers you wouldn’t otherwise have access to.

Merchant account service providers like MerchACT provides a payment gateway with options: a merchant can maintain full control of the account or the merchant can allow MerchACT to represent on behalf of them to their merchant bank.

How Long are you in the Business?

We are in the business of processing merchant accounts for more than 14 years. Our clients have processed billions of dollars in sales selling direct to consumers through online services such as dating, MMOGs, and digital goods and subscriptions to internet retail, and direct response.

We can honestly say we understand the card-not-present industry better than most merchant service companies.

What is a Chargeback?

Chargeback happens when a credit card transaction is disputed either at the request of the Issuer or by a card Holder, you may receive a chargeback. When chargeback happens, the complete amount of the original sale as well as a chargeback fee will be subtracted from the saving or checking account you provided.

Some of the most common reasons for chargebacks may include:

*The merchandise received is damaged in transit and arrives broken.

*A cardholder/client returns the merchandise, but has failed to receive a refund.

*A cardholder disputes a transaction as a misuse/fraudulent use of their card.

To ensure safe receipt of your merchandise to a client, always use a form of shipping that gives proof of delivery. For higher ticket items, you should require a signature for the delivery. If a customer contacts you with a complaint about his/her purchase, follow through with that buyer to clear up the dispute. If you can’t fix the dispute to mutual satisfaction, teach the buyer how to return the merchandise and a form of shipping they should use.

How do Online Payments Work?

Online merchants need the ability to process payments online, including credit and debit card payments. In order to accept payment cards online, merchants need to establish a merchant account with an acquiring bank. They may also work with a payment processor, who provides a payment gateway through which customers can enter their credit card information online.
There are many types of payment services providers that can assist merchants with establishing merchant accounts, setting up a payment gateway and finding the right solutions to help make payment processing more safe, secure, and streamlined.

How do I know which Merchant Account is right for my business?

There are two types of accounts: a Domestic Merchant Account, and an Offshore Merchant Account. Let us know the nature of your industry, kindly reach us through our Contact Us page and we’ll be more than willing to package a solution that would best suit your business.

How do I accept Credit Card Payments for my e-commerce store?

As an e-commerce business, all of your orders will be taken remotely – via the internet or phone. This is referred to as card-not-present or CNP payments, since there is no face-to-face interaction and the card is not physically present with the merchant at the time of purchase.

Some third-party marketplaces  allow web-based merchants that sell through them to accept payments through their site. In these cases, a separate merchant account is not required.

For online merchants who have a standalone e-commerce website that integrates a shopping cart, a merchant account is typically required. In these cases, a merchant can work with a merchant account services provider which acts as a middleman between the merchant and the customer’s issuing bank. A merchant account services provider helps merchants process payments and in some cases, can also provide additional payment processing solution to streamline payments. These payment processing solutions include PCI compliance, fraud and chargeback prevention, a payment gateway and multi-currency options.

There are different costs associated with the ability to accept credit card payments for an e-commerce store. Some include setup and monthly fees. All will charge transaction fees, which may vary by provider. Some processors charge fees on a tier system, wherein higher transaction fees are charged for small sales volume, and the transaction fees decrease as monthly sales increase.

For entrepreneurs and business owners with poor or no credit, it can sometimes be difficult to find a merchant services provider to help them accept credit card payments for their e-commerce store. Some payment processors specialize in this area and can get these merchants set up quickly with a merchant account to begin processing payments.

What is Credit Card Processing?

Merchant Services, or better known as credit card processing, are authorized financial services that allow a business to accept credit or debit card transactions using online ordering. It may be offered by your bank, by specialized merchant service providers or independent sales organizations that offer payment processing.

How do I apply for a merchant account?

Applying for a merchant account with MerchACT is quick and easy. Simply fill out the free, no obligation, online merchant account application on our website we’ll be in touch with you shortly to help get you set up.

Do you accept foreign businesses?

Yes, we can process for merchants outside the United States. We have Offshore/International Merchant Accounts for businesses available worldwide.

What is e-commerce?

E-commerce is a term used to describe a company that conduct commercial transactions on the internet. In e-commerce transactions, the payment process occurs electronically through online payment “gateways” that integrate directly into your shopping cart.

What are the costs for your processing and other services?

Because we cater to a wide variety of unique industries, our processing services are customized according to our client’s specific needs. Our pricing is based on the type of industry, the method in which payments are accepted, and a number of other factors. To receive a personalized quote, please fill out the free quote form on our website and we will respond promptly.

What is a High Risk Merchant?

A high risk merchant is a merchant considered to pose additional risks to the merchant acquiring bank and or payment processors. Most businesses offer unique products and services, however, when it comes to processing payments, there are certain industries that are automatically deemed high risk. These include:

Dating, Free Trial, Multi-level Marketing (MLM), Bitcoin Mining, Adult, Forex, Binary, Membership Clubs, High Volume, International, Startups, Telemarketing, Software, Travel, Offshore, Travel, Psychic, Drug Paraphernalia, Coupon Programs, Direct Selling, Non-US Based International, Lotteries, Mail Order, TMF, Pawn Shops, Social Apps, Replica Merchandise, Extended Warranty, Vacation Rentals, Weapons and more.

These designations are made by the risk and underwriting departments of banks. High risk merchants often have difficulty establishing a merchant account with traditional payment processors and/or banks. High risk merchants also need to carefully review the details of their contract. Some merchant account providers may impose termination fees or other incidental penalties. Others require a rolling reserve as a way of hedging their bets against your future returns. Rolling reserves are not uncommon for high risk merchants, though the amount required by the processor may vary.

Payment processors like MerchACT cater to these categories to provide well-managed, cost-efficient streamlined payment processing for high risk merchants who otherwise may be unable to process credit card payments.

Why am I considered a High Risk Merchant?

A merchant that has a high risk of fraud and chargebacks or who use marketing tactics deemed questionable by traditional banks and payment processors is often labeled as a high risk merchant. There are certain industries that fall into this category, including:

Dating, Free Trial, Multi-level Marketing (MLM), Bitcoin Mining, Adult, Forex, Binary, Membership Clubs, High Volume, International, Startups, Telemarketing, Software, Travel, Offshore, Travel, Psychic, Drug Paraphernalia, Coupon Programs, Direct Selling, Non-US Based International, Lotteries, Mail Order, TMF, Pawn Shops, Social Apps, Replica Merchandise, Extended Warranty, Vacation Rentals, Weapons and more.

Being labeled a high risk merchant often comes with high discount rates and large security reserves, however, there are specialized merchant account providers that can help high risk merchants obtain a merchant account and process payments efficiently.

Whether or not a business is labeled a high risk merchant depends on the payment processor’s underwriting guidelines. When a merchant applies for a merchant account, they are required to submit an executive summary that includes relevant information including financial history, volume projections, fraud and risk mitigation tools, and other industry insights. Depending on the type of business additional information may be required. For example, MLM companies that have volatile volumes may need to explain this and present a more detailed financial and/or processing history. Companies with long fulfillment duration may need to demonstrate their ability to prevent chargebacks, which can occur more frequently the longer the time span between payment and service/product fulfillment. This is reviewed by the underwriting department, which then determines whether or not to approve the merchant account. Merchants labeled high-risk are often unable to obtain a traditional merchant account.

What is a Payment Processor?

A payment processor is a third party provider that a merchant selects to handle transactions via merchant acquiring banks. These payment processors help merchants accept credit and debit payment cards by providing authorization and settlement services to the merchants. They assist in the transfer of money from the customer’s issuing bank to the merchant bank.

A payment processor will help with verification, ensuring the details used in the transaction match what is on file with the card’s issuing bank or card association. Payment processors can also implement and execute fraud prevention tools and measures to ensure that the transaction is legitimate.
Upon confirmation of the credit card details from the issuing bank and/or card association, the payment processor sends the information back to the merchant via a payment gateway, through which the transaction can be completed. In the case of fraud or incorrect/incomplete payment card information, the payment processor relays the information back to the merchant who can then decline the transaction.

Why Did my Merchant Account Get Terminated?

Merchant accounts may be terminated for a number of reasons. In some cases, certain business models pose additional risk to merchant acquiring banks and the determination is made to terminate the account. This can happen with merchants who fall into the high-risk category, including recurring merchants, free trial merchants, online dating or adult merchants, telemarketing merchants, cannabis merchants and others.

These high risk merchants often face a high level of chargebacks, which can create additional liability for the acquiring bank. Often, merchants are placed on a chargeback monitoring program by the card brands, which is supervised by the acquiring bank. If the merchant is unable to get chargebacks under control within a specified time frame, that merchant may face merchant account termination.
Some merchants process transactions at volatile volumes. They may process $10,000 in sales one month and $100,000 in sales another month. The unpredictability of volume often creates additional liability for the acquiring bank, causing the bank to terminate the merchant account.

Can I Still Process Payments After My Merchant Account is Terminated?

Depending on your specific situation, you may be able to process payments after your merchant account is terminated. Since terminated merchants are placed on the Member Alert to Control High Risk Merchants (MATCH) list, many acquiring banks will screen applicants against this list and deny listed merchants the ability to obtain a new merchant account. This list is sometimes referred to as the Terminated Merchant File or TMF, which is an older reference.

Terminated merchants can work with high risk merchant account service providers that cater to their unique business needs. These specialized merchant account service providers often have relationships with special banks that are more comfortable working with high risk merchants. They can help terminated merchants find both domestic and offshore merchant accounts, as well as merchant accounts that do not have volume caps.

Can I Process Payments Internationally?

If you are able to get a merchant account, you can process payments internationally. Since online merchants have the ability to sell globally, the only requirement is the ability to accept credit and debit cards online. This requires a stable merchant account. High risk merchants may need to work with a specialized merchant account services provider to obtain a special merchant account that enables them to process online payments for their e-commerce business.
Once a merchant account is established, the merchant needs to set up a payment gateway that enables payment processing. To process payments internationally, merchants should ensure that their payment gateway has the ability to accept international transactions in different currencies. Merchants may want to consider working with a merchant account services provider that can guide them through the solutions that need to be in place to accept multiple currencies. There are other considerations involved, including international shipping fees as well as taxes and tax conversions.

What is a Merchant Aggregator

A merchant aggregator (sometimes referred to as a processing aggregator) enables merchants to accept credit and debit card payments and bank transfers through the merchant aggregator’s merchant account. In this way, the merchant does not needs to establish its own merchant account. Rather, the merchants who utilize the merchant aggregator are pooled together under a joint merchant account maintained by the aggregator.

Merchant aggregators provide a lower barrier to entry because they manage the merchant account and provide quick setup for merchants. However, because they are taking on additional risk, merchant aggregators have different cost structures than merchants would see if they had their own merchant account. These fees often include transaction interchange and monthly fees in addition to their own merchant account costs, which are often passed down to the merchants under their umbrella. They may also charge additional fees for international transactions, faster funding, and chargeback disputes. Some may also require merchants to maintain a reserve as a way to hedge against potential fraud and other liabilities.

This may not be the right option for merchants who work with other businesses to fulfill purchase orders as some merchant aggregators only support credit and debit card transactions and cannot accept ACH or checks. Merchants also don’t receive the same full-scale fraud and risk mitigation support they normally enjoy with a payment processor via their own merchant account.

What is PCI Compliance?

PCI Compliance is a requirement of The Payment Card Industry Data Security Standard (PCI DSS). The PCI DSS is a set of security standards to ensure a secure payment processing environment for all parties that accept, process, store or transmit payment card information.

PCI DSS requirements are guided by the Payment Card Industry Security Standards Council (PCI SSC), which continues to lead the evolving requirements. As emerging technologies and new payment methods are developed, this body ensures that payment account security remains intact for all entities involved.

Any company that accepts, transmits or stores cardholder data must abide by the PCI DSS requirements and faces fines, fees and penalties for non-compliance. Compliance standards are divided into four merchant levels, which are determined according to Visa aggregate transaction volume over a 12-month period, including credit, debit and prepaid cards.
Organizations who use third party payment processors are still required to maintain PCI DSS compliance; however, some processors lessen the scope of PCI compliance by reducing risk exposure.

What are Card-Not-Present Payments

Card-Not-Present payments, sometimes referred to as “CNP” payments, include transactions that occur without the physical card being present. This includes internet, mail, fax and telephone orders. These transactions pose a higher risk than card-present transactions because there is a higher likelihood that someone other than the cardholder is attempting to make a purchase.

Due to the high-risk nature of these payments, merchants must have solid fraud detection and risk mitigation tools in place, including authentication and validation protocol. Working with a payment processor who has knowledge of tailored fraud prevention tools can help a merchant deter fraud without losing out on legitimate sales. Card-not-present payments are more subject to chargebacks, which result when a transaction is disputed by the cardholder. In some cases, this occurs as friendly fraud, where the cardholder actually did make the purchase, but has decided to try and defraud the merchant in an attempt to get a refund. In other cases, they are a result of true fraud where the card data was stolen or illegally obtained and used to make a purchase without the cardholder’s knowledge. In both scenarios, the merchant cost is high: they must refund the purchase, often lose the cost of the goods, and face fines and fees from their acquirer and the card associations.

Card-not-present payments have become a popular payment method with the rise of online shopping and e-commerce. It facilitates convenient shopping for consumers who wish to make purchases from the comfort of their own home and it enables online merchants to expand their consumer base beyond the borders of their physical location.

What are Chargebacks?

Chargebacks are transactions that are disputed by the cardholder. Chargebacks were established to protect cardholders from unauthorized transactions. Once a chargeback is initiated, the merchant may not find out about it for up to 120 days after the purchase. In the meantime, the chargeback journeys through the issuing bank, the card association and the acquirer. The issuing bank investigates the dispute and, if it finds the fraud claim to be legitimate, will refund the amount of the transaction and deduct the amount from the merchant’s account. Chargebacks cost merchants the the cost of the refund, the cost of the goods/services sold, the time spent investigating the chargeback and fines and fees by the card brands.

Chargebacks also cost the merchants in the form of reputation with the acquirers and card brands. When a merchant receives too many chargebacks, it is placed on a monitoring program where it much lower their chargeback ratio or face additional fines and penalties. If it fails to keep chargebacks in check, the merchant may have its merchant account terminated. After account termination, merchants may find it very difficult to re-establish another merchant account. Fortunately, there are payment processors like MerchACT who specialize in working with high-risk merchants who have had a merchant account terminated.
Merchants should always have fraud prevention tools in place to protect against chargebacks. Working with a payment processor who has extensive knowledge of fraud prevention tools can be a good first step in protecting transactions from fraud and chargebacks. Many solutions can protect high volume orders from chargebacks without adding customer friction.

How Do I Prevent Chargebacks?

Chargebacks are undesirable for merchants of all shapes and sizes and they happen for a number of reasons. A cardholder may initiate a chargeback if they didn’t receive the product they ordered, if they received a product that was damaged or did not match the product description, if they were incorrectly billed, or if they did not recognize the charge on their monthly credit card statement.

Merchants can prevent chargebacks by facilitating better communication with their customers. To avoid confusion, merchants should use clear billing descriptors that include contact information. Merchants should also clearly post customer service information on websites and invoices, so customer issues can be resolved directly with the merchant. Taking proactive measures with customer support can cut down on unnecessary chargebacks.
In cases of true fraud, merchants should employ end-to-end fraud protection for transactions. There are varying types of fraud prevention tools available and it can be beneficial to work with an experienced payment consultant who can advice on the appropriate solutions for your business.


Whether you are a start-up business, a developing merchant looking for a payment processing solution, or an established business who needs help aquiring additional merchant account relationships, we got you covered.