Merchant Account Charge Amount Restrictions
When seeking a merchant account, it's important to know the details - especially when it comes to limits on how much money you can accept.
A monthly charge amount limit is not uncommon. Such a limit restricts merchant's from accepting more than a certain amount of payments, say $20,000, in a given month. Once that limit is reached the merchant account may halt acceptance of future charges, or impose additional fees.
NOTE: One client contacted their merchant account company in advance, expecting sales of more than $100,000 in a specific weekend. With a limit of $50,000 monthly, all additional sales were halted and they were given two options: either manually split the sales up across future months or seek a new merchant account. They opted for the latter.
Merchant accounts may also impose daily limits or per-charge limits (which is not that common, but a client recently encountered this issue).
A good merchant account company (or bank) will work with merchants when circumstances change. A few years back I called ours in advance when we expected tremendous hikes in charges for three future months. The limit was temporarily lifted, but deposits over the pre-set limit were held for an additional 10 days.
Merchant accounts work this way because they need to ensure that you'll cover any returns (credits) and possible chargebacks. After all, they're not in business to risk losing money on the funds they've already returned to customers.
Just about any small business can expect to have limits imposed, most commonly on a monthly basis. However, per-charge or daily limits should be either lifted or negotiated prior to signing on the dotted line. You don't want to lose sales because business is going well. Keep in mind there are hundreds of good merchant account companies out there - don't feel you have to go with any specific one.
