Your merchant account has been terminated- What’s next?

Your customers expect a certain level of convenience and ease when they shop, therefore accepting credit cards is a pretty good idea to give them additional options.  Credit card processing and merchant accounts go hand-in-hand with accepting credit cards and without a merchant account you could find yourself in a difficult position.  There are several reasons why a provider might decide to close or terminate your merchant account and it is important to understand these reasons to ensure your credit card processing goes smoothly.  If you fail to abide by your merchant account agreement you could lose that account which most likely will result in a loss of customers and sales.  Here we look at what you can do if your merchant account has been closed.

Root of the problem

Before you can move forward reopening a merchant account or seeking a new merchant account, you must first determine what caused the termination in the first place.  In some cases this may be the result of an accidental breach of contract or cases of fraud.  Regardless of the cause, without finding out where you went wrong you will be unable to rectify the problem.


Find out if you have landed your business on the TMF (terminated merchant file or the MATCH file).  This is the equivalent of a black list for merchants who have had their merchant account negatively closed.  If this is the case, you can anticipate a much more difficult process obtaining a new merchant account.

Contact your provider

Clearly, to discover the how’s and why’s of the termination requires a call to the merchant account provider.  Understand that when you call the provider you may end up talking to several people in different departments.  Be prepared to take notes and ask the right questions to determine what went wrong and what your options are moving forward.

Be prepared to take action

Perhaps your merchant account was closed due to insufficient funds to pay fees.  Or maybe you have a high number of chargebacks or have exceeded certain limits.  Suspicion of fraud is another major reason merchant accounts are closed.  When you find out where the problem lies you must be ready and able to remedy the situation if you ever want to have a merchant account again in the future.

Legal action

If you are unable to come up with a resolution that the merchant account provider agrees with, you may be required to take legal action.  This generally results in arbitration where both parties agree to discuss the issue outside of the legal system to avoid or reduce legal expenses.


The best way to avoid having your merchant account terminated is by first understanding the terms and conditions to which you are bound.  By conducting business within these terms and conditions you can avoid any danger of having your merchant account closed.  Since you are not always there to run your business 24/7 it is important that all relevant employees are educated and trained on the proper credit card processing procedures.

Posted on Friday, September 10th, 2010