How Some Credit Card Processing Companies Seem to Be Strangling Ecommerce (Why We Love Amex & Discover) at MarketingSherpa.com brings to light interesting facts about credit card processing companies. Marketing Sherpa cannot take Mastercard or Visa through the end of February on their web site because they reached a pre-defined revenue limit with the card companies. Marketing Sherpa can still take American Express and Discover because apparently these cards either don’t have these limits or they are substantially higher.
According to the article, Visa and Mastercard give each merchant a revenue ceiling to limit their risk. The risk occurs because customers in the US have 90 days to complain about fraudulent charges and get them removed. If if a merchant suddenly goes bankrupt or flees the country with 90 days of revenues, the credit card company is responsible for the debt.
Apparently, situations like can and do occur. Once you have processed a certain amount of monthly revenue through Mastercard and Visa, they can shut off without warning. Site owners can try and avoid this by accepting American Express and Discover or allowing customers to be billed. One good thing is that it is a monthly limit. At the end of the month, they will reset the limit and turn processing back on.
I was surprised to learn this, and I suspect most site owners did not know this either. At least now, you can educate yourself and learn what the limits are so you can try and figure out when you are close and provide alternative processes if you anticipate being shut down.