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How to Avoid a Freeze on Your Merchant Account

Updated: Dec 29, 2023

One of the worst things that can happen to a business’s merchant account is that it’s frozen by the payment processor- especially depending on how established and financially stable it is. And, even worse, there’s not much that can be done except to corporate with, and then wait out, the processor’s investigation. Don’t be forced to deal with the hassle of a frozen merchant account by learning how to avoid it instead!

How to Avoid a Freeze

From suspected fraud to increased chargebacks, there are lots of reasons a payments provider can choose to freeze your account- so the easiest way to handle a freeze on a merchant account is to avoid it, and these are the best ways how:

1. Choose the right processor: as in, be sure to work with a payments provider who is familiar with your industry. This might seem basic but it’s incredibly important for your service provider to understand the business you conduct.

2. Inform your processor of large sales: if you’re about to process an unusually large transaction, inform the processor so they can be aware! If they detect abnormal sales fluctuations, they can (and will) hold your funds until an analysis is complete.

3. Focus on minimizing chargebacks: excessive chargebacks can literally shut down your ability to accept credit and debit cards- but by working closely with your service provider and utilizing anti-fraud tools, minimizing chargebacks should be manageable.

4. Keep your processor in the loop: always notify your provider of any company changes that may occur- especially if it means consistently processing more or higher-priced items (there’s a chance you might move into the high-risk category, which means a new, specialized account is needed). Without notice they can flag your business, leading to a hold or even a freeze on your funds.

5. Only sell products or services previously agreed on: when you sign up with a processor, you’ll fill out an application, including what your business is and what you expect to sell. Make sure you stick to offering those types of products to avoid negative account outcomes!

6. Never accept payments for another person or business: this should be obvious but it’s illegal to accept payments for others. Only use your merchant account for your business and never for outside or unauthorized transactions.

The best way to deal with a frozen merchant account is to avoid it- by following our tips, you can keep your business account healthy, functioning, and open! And when you’re ready to work with the best, reach out to Align ecommerce where we’ve got the tools and technology to help. Here are some related articles that might help you in your journey.

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