E-Commerce Volume Cap Restrictions
E-Commerce Volume Cap Restrictions Can Be A Holiday Buzz Kill
Seasonal sales are booming with the holidays fast approaching, but can your merchant account handle the higher volume? Or will your volume cap restrictions end your ability to process credit card transactions?
It can happen to you. You might think, “My merchant provider wouldn’t shut down merchant accounts during the busiest time of the year. They would be losing a tremendous amount of money.” As strange and frustrating as it seems to a busy business owner, merchant providers do put a hold on accounts that reach their monthly volume cap restrictions.
If the total dollar amount of sales happens to exceed the preset limit, the merchant will no longer be able to accept credit cards as payment. For example, if you as the business owner has an assigned limit of $100,000 and your credit card receivables are in excess of that number, you may not be able to process until the following month.
Merchant providers also have a tendency to shut down accounts and hold signiﬁcant funds if they see a large increase in sales during a short period of time. E-commerce and MOTO (or mail order/telephone order) are unfortunately the most common accounts that this happens to. Choice Merchant Solutions manages the volume caps utilizing sophisticated techniques to mitigate this risk.
Why Do Merchant Providers Shut Down Accounts That Exceed Their Monthly Cap?
As a business owner with a capped merchant account, you have to realize that the provider is being cautious. They are protecting themselves and the major banks (Visa, Mastercard, Amex etc) from credit card fraud.
Many companies also implement a “reserve,” which is a portion of your credit card sales set aside to mitigate any chargebacks that may occur. Thusly, only 90% or so of your sales are deposited into your business’ bank account, while the other 10% is held as a safety net.
What Do I Do?
At Choice Merchant Solutions, we provide our clients with merchant accounts that suit their needs. Being constrained by your merchant processor is bad for business, so we offer customizable MIDs and in some occasions uncapped MIDs. We’re an established business that has many bank relationships, but also small enough where we can work with our clients closely to make sure their processing is never interrupted.
Our merchant accounts grow with the business owner and instead of volume constraints and only a few thousand dollar increases when requested, we can supply monthly increases at a 20% delta. For example, this means if you have a processing limit of $100,000 during month one but need to increase your processing cap, during month two we can increase it to $120,000. So forth and so on.
Want to learn more about our merchant processing? Click here.