What to Do If Your eCommerce Merchant Account Gets Suspended

For eCommerce companies, merchant account suspensions can be a devastating disruption to business operations. They can stall all digital payment processing for transactions, causing severe customer service issues that can permanently damage your company's reputation. And that doesn't include the likelihood of being added to the MATCH List, a blacklist of payment processors, which identifies high-risk businesses to avoid.

But don't worry, Adaptiv Payments is here to help. Below, we’ll discuss everything about what to do if your eCommerce merchant account gets suspended, as well as how Adaptiv’s services can help your business. Read on to find out how to deal with and even avoid suspensions in the future.

What Does an Account Suspension Mean?

A merchant account suspension is a temporary ban on your business's ability to accept and process payments. This generally happens because your merchant account provider has flagged you for excessive fraudulent transactions, high chargeback rates, and or other policy violations.

You may also experience events like temporary holds or full account termination if your account has compiled enough flags to be deemed risky. Temporary holds occur when payment processors hold back funds until they verify that you are not involved in potential fraud or contract violations. Account termination occurs when a processor permanently closes your account (for reasons previously stated).

Holds, suspensions, and terminations are all detrimental to your business, so it is best to take the necessary steps to avoid them. That is especially true for account terminations, as this could potentially land your business on the MATCH list.

What the MATCH List is & Why It Matters

The Member Alert to Control High-Risk Merchants (MATCH) List is a blacklist of blocked merchants made by Mastercard. The list is used by popular payment processors to identify and avoid businesses with histories of fraudulent transactions, high chargeback rates, poor compliance records, and other issues. By following this list, processors avoid working with excessively risky partners.

It is crucial that your eCommerce business does not end up on this list. Why? Not only does it significantly damage your brand's reputation, but it also makes it extremely challenging to open a new merchant account anywhere else for up to five years. That can result in huge losses for your business that go beyond financial strain.

The Most Common Reasons for eCommerce Merchant Suspensions

Business owners are upset about their eCommerce merchant account getting suspended.

Credit: Adaptiv Payments

While it takes quite a lot to receive a merchant account termination, it can be pretty easy to receive a suspension if you're not careful. Here are four frequent reasons providers suspend eCommerce merchant accounts:

High Chargebacks & Fraud Ratios

Whenever a customer disputes a charge on their debit or credit payment, that's a chargeback. Card networks, such as Visa and Mastercard, have a one percent chargeback threshold.

This is the limit of chargebacks a merchant can receive as a percentage of the total number of transactions during a certain period. Exceeding this limit on a consistent basis results in penalties, such as steep fees or tighter monitoring of transactions.

The ratio of acceptable and fraudulent transactions has the same kind of scrutiny. If either is too high, suspension of your merchant account is inevitable.

Business in High-Risk Products or Business Models

Another cause of merchant account suspension is that your product or business model has been considered too high-risk. This is particularly troubling for eCommerce, as its digital-only nature makes it vulnerable to fraud, chargebacks, and, increasingly, online threats from hackers and other bad actors.

Plus, eCommerce businesses require specialized processing for their digital-only transactions, which can be difficult for certain payment service providers to handle. Unless you consistently maintain a strong standard of customer satisfaction, regulatory compliance, and data security, your eCommerce site will likely be in danger of account suspension or even a permanent ban.

Consistent Compliance & Policy Violations

Payment processors also penalize businesses that consistently fail to comply with regulations or breach contractual obligations. For an honest business, actions that violate regulations and policy are easy to avoid. For example, avoid marketing misleading or unrealistic product promotions by plainly stating your company’s policies.

If your eCommerce business sells nutraceuticals or custom workout plans, don't make potentially unsubstantiated or harmful health claims. While receiving suspensions for these practices is a form of consumer protection, they also provide financial and reputational protection for processors. Banks only want to work with trustworthy partners, so ensure your business is a reputable one.

Sudden Change in Volume or Processing Behavior

The last reason payment processors often suspend eCommerce merchant accounts is that they suddenly experience a shift in sales volumes or processing conditions.

When red flags like an unprecedented spike in sales appear in your account, a suspension may be deemed necessary, especially if there's highly relevant information that has been left out. Unusually fast growth can appear suspicious to processors, as can upticks in international transactions. To ensure there are no issues, communicate with your processor so they are aware of and understand the recent changes in your business.

To ensure your eCommerce business has the solutions and protections in place to prevent suspension, work with Adaptiv Payments. You'll receive payment services tailored to your specific needs, along with comprehensive customer support. Lose the suspense and contact us about our reliable merchant account services.

Steps You Should Take Following an eCommerce Merchant Account Suspension

Oftentimes, a merchant account suspension is sudden and unexpected. So, when you face account issues out of nowhere, you should have a plan in place. That way, your company can act promptly to resolve any issues related to your suspension. Here are a few steps we recommend you take if it ever occurs:

Contact Your Processors & Request Reasons for Suspension

The first step is to contact your merchant account provider. This isn't a time for guesswork, but a deep and thorough investigation to clear your name. Ask for specific details. Was your refund policy too vague? Does the account provider believe a recent marketing campaign involved misleading or unrealistic promotions? Does a new item in your eCommerce store have problematic product details? Identify the issues, so you can resolve them as soon as possible.

Stop Processing Payments and Don't Use Workarounds

Do not try to process payments any other way. That can only end up making things worse for your company. If a payment processor determines that your business has committed a specific violation outlined in your contract with them, that’s sufficient enough to place your merchant account on suspension, taking other steps to continue processing transactions may only appear more suspicious. Depending on how far you go, you may even risk being placed on the MATCH List, which is best avoided.

Secure Cash Flow

Since selling products using accepted payment methods, which are almost all done electronically through a payment processor, is no longer available, you'll need to address two key concerns: managing your cash flow and fulfilling outstanding customer orders or subscription bills.

If necessary, take a cool-down period and suspend order fulfillment temporarily until you can conduct a comprehensive assessment of your situation. Figure out how to settle customer orders and refunds.

Then, just before it’s time to come back, ensure your customer service teams are prepared to handle a high volume of requests and inquiries. During these times, a little clear communication can help minimize future losses.

Of course, when suspended, you can decide to apply for a new account with a more amenable high-risk merchant account provider, such as Adaptiv Payments.

How a High-Risk Merchant Account Provider Can Help After a Suspension

Business owner shaking hands with someone off-screen, representing an eCommerce company partnering with a high-risk merchant account provider.

Credit: Adaptiv Payments

Perhaps a merchant account suspension is a sign that your provider isn't a great fit for your specific business, especially if you are operating in high-risk eCommerce spaces like CBD, gaming, or gambling. Consider the powerful benefits of working with high-risk providers, such as:

• Accurate Risk Evaluations: High-risk providers can conduct a more thorough assessment of your products than regular processors, with improved fulfillment timelines, billing practices, and marketing claims. More experience working with high-risk industries means they will be more accurate.
• Connecting with Proper Acquiring Banks: Many merchant account providers work with only one sponsor bank or another. High-risk providers work with multiple sponsor banks, ensuring your business aligns with one that has acceptable risk thresholds, allowing you to process payments safely in the long term.
• Structuring Accounts for Stability: High-risk providers also know how to set up merchant accounts that ensure your business survives through increases in scale and scrutiny. They'll apply rolling reserves to protect against chargebacks and ensure settlement schedules align with your fulfillment timelines.
• Managing Against Chargeback & Fraud: Since they work with heavily scrutinized industries, high-risk merchant account providers help businesses reduce their chargeback and fraud rates. They provide tools to monitor transactions and ensure that customer support teams adequately avoid potential chargebacks.

Merchant Account Suspended? Work with a Reliable Provider.

While your merchant account may be suspended, that doesn't necessarily mean the end for your business. Yes, you'll have to adjust to many different circumstances than before. However, with the right partner in payment processing at your side, you'll be less likely to experience the hardships caused by a sudden merchant account suspension.

At Adaptiv Payments, we work with a wide range of high-risk merchants, including many in the eCommerce space. We work closely with our clients to ensure they are paired with the right sponsoring bank, one that is willing to work in diverse high-risk industries for the long term.

This, along with services such as our tailored payment solutions and fraud protection, ensures that your business can safely process payments and enjoy successful growth. Sign up today and learn how Adaptiv can transform your payment system.