US-Based Merchant Account Restrictions

Certain business types are restricted from establishing US-based small business merchant accounts. The decision on who exactly is to be included in this “black List” is made by the Credit Card Associations of Visa and MasterCard and is mandatory for all credit card processing companies which are also their members. What this means is that no US credit card merchant processor is allowed to acquire transactions from blacklisted entities.

The biggest factor in determining whether a particular type of business should be prohibited from setting up a US-based credit card payment processing service is the chargeback generation potential. In some industries, historical data show that it is simply unacceptably high. It should be noted that, even when a merchant account processing service is established, chargeback levels are still closely monitored and, if they exceed 1% of the total volume for three consecutive months, you will lose your credit card processing account. Applications from merchants engaged in the following activities will not be considered for US-based credit card transaction processing account, regardless of exception:
Any merchant engaged in Illegal activity. Adult oriented products or services (all media types: internet, telephone, printed material etc.). Internet/MOTO pharmacies (where fulfillment of medication is performed with an Internet or telephone consultation, absent a physical visit with a physician). Re-importation of pharmaceuticals from foreign countries. Internet/MOTO firearm or weapons sales (including ammunition). Internet/MOTO cigarette tobacco sales. Occult materials. Online gambling. Lotteries, raffles, gambling. Escort services. Collection agencies engaged in the collection of uncollectible debt, as defined by the Associations. Credit repair agencies. Sports forecasting or odds making.