Non-Acceptable Businesses for Credit Card Merchant Services

There are quite a few business types that are restricted or outright barred from setting up credit card merchant services in the U.S. The ultimate decision on exactly what business categories are included in these "black lists" are made by the payment processing providers, although the Credit Card Associations of Visa and MasterCard certainly play a role in the process. These lists are periodically updated and certain types may be included or excluded.

The single biggest factor taken into account by the processors when determining whether or not a particular type of business should be allowed to set up a US-based merchant account is the risk of generating chargebacks. Historical data show that in some industries the chargeback risk is simply too high. It should be said that, even when credit card merchant services are set up, chargeback levels are monitored on a continuous basis and, if they go over one percent of the total transaction count for any single month, the business will be categorized as excessive chargeback merchant (ECM) and subjected to heavy additional requirements. Businesses that can't fix their chargeback issue within three consecutive months lose their processing accounts altogether.

Following is a sample of business types for which credit card merchant services will be rejected, however remember that each processor makes their own list.

• Advanced payments greater than 1 year.
• Airlines.
• Any merchant engaged in illegal products or activities.
• Bidding fee auctions.
• Business / investment types operating as "get-rich-quick" schemes.
• Adult oriented products or services (all media types: internet, telephone, printed material etc.).
• Cash advances (except regulated financial institutions).
• Internet and mail order / telephone order (MO / TO) pharmacies (where the fulfillment of the prescription is performed with an online or telephone consultation, without a physical visit with a physician).
• Charities without proof of 501( C ) (3) status.
• Check cashing establishments.
• Collection agencies or any other entities engaged in the collection of past due receivables.
• Companion or escort services.
• Internet or MO / TO firearm or weapons sales (including ammunition).
• Credit card protection or identity theft service.
• Internet or MO / TO cigarette tobacco sales.
• Occult services or materials.
• Internet gambling.
• Credit repair or restoration services.
• Currency exchanges.
• Any types of lotteries or raffles.
• Sports forecasting services or odds making.
• Extended warranty companies.
• Foreclosure protection and guarantees.
• Herbal smoking blends and herbal incense.
• Lifetime subscriptions for any product or service.