UnderwritingGuidelines

Transcription

1 inn o v ation t h r o ugh e v e r y t r ansa c t i o n T M Underwriting is a crucial part of the merchant application process. It is paramount to adhere to the enclosed guidelines in order to expedite the review and approval process. Although many applications may be underwritten and approved with minimal information provided, this guide is to assist sales agents in understanding underwriting procedures and how to facilitate the approval process. Electronic Payments will consider nearly every application and work with our sales agents to approve their merchants; sponsor bank. We reserve the right to decline any application that presents an unfavorable risk to our company or member bank at any time. Currently, Electronic Payments uses a PDF or paper application that can be ed, faxed or mailed. At the time an application is received, the application is placed in an underwriting folder, which is then placed in the underwriting queue. Every application is reviewed for its completeness, and underwriting is processed on a FIFO (First In First Out) basis. smoothly and ensuring fast turnaround on all your accounts. This guide was prepared to enable our sales agents to fully understand what is required with each and every application submitted to Electronic Payments.

2 inn o v ation t h r o ugh e v e r y t r ansa c t i o n T M What is the required information for the merchant application? All Merchant Applications must be fully completed, signed and guaranteed by at least a 50% shareholder(s) of a Corporation, LLC, 501(c)(3 - ship. If not guaranteed by at least 50%, a corp resolution is required from the Board giving the signer(s) authority to set up an account. In addition to the sales agent s signature on the bottom of the second page of the application, the following information should also be on the application: Merchant Information Section Section 1 Business Details Section Section 2 Completed Owner s/officer s Information Section Section 3 Sections 4 thru 7 Site Survey Section Completed in Full on Application by Sales Agent Section 8 Completed Rates and Fees Section Section 9 Completed Terminal Setup Form Signed Personal Guarantee and Acceptance of Agreement Section Sections 10 and 11 Guide Page 4 of Application For partnerships or corporations with a board of director-type structure, please speak with your RM (Relationship Manager) for details on the proper signing and documentation. What will delay your account? Incomplete or illegible applications Higher-risk accounts requiring more review A delay in getting the proper additional information to Electronic Payments Unusually high application volumes beyond daily expectations Poor Credit Underwriting Categories For the purposes of underwriting, we have established the following categories: 1) Retail 1 Majority are Approved, Regardless of Credit All Low Risk Retail Businesses (Stores, Restaurants, Doctors, etc.) 2) Retail 2 3) MOTO 1* Established MOTO/Internet Businesses Currently Processing 4) MOTO 2* 5) Retail/MOTO 3 (All Not Falling Into Above Categories)* *Categories 3-5 are all considered high risk, beyond poor credit with no supporting documents and may have to be submitted to Tier II for review. If unsure, contact ISO Support.

3 Retail Merchants Retail accounts are those that are in a card swiped environment where more than 80% of the transactions are swiped through a POS (Point of Sale) terminal or similar device. Nearly all of the merchants that have a storefront or Main Street business presence would fall into Retail 1 or Retail 2 categories. All accounts that are currently processing should be submitted with recent processing statements when available to show current volumes and high tickets. Electronic Payments generally will not limit those merchants from processing high tickets or high volumes as long as they are sent in with supporting documentation. All deals must include a minimum of two (2) pieces of business collateral. We will also conduct additional research in-house as necessary. Additional business collateral may be requested based on credit, volumes, ticket values, etc. NOTE: For monthly volume caps on merchants, Electronic Payments may require further documentation such $1 Million or more in Visa/MasterCard transactions. Consult with ISO Support for more details

4 RETAIL 1 MERCHANTS New Business: Less than $50k volume per month if start-up business Currently Processing* 80% card swiped Less than $2,000 average ticket Retail or Restaurant Merchants Retail Storefronts o EXCLUDES those on the unacceptable merchant list, and Visa/MasterCard TMF/MATCH, regardless of TOB Pay at Pump Bars, Nightclubs Hotel/Motel/Lodging Supermarkets, Produce and Meat Markets Movie theaters Delis and QSRs Retail 1 Retail Documentation Complete merchant application with account setup form Voided check or bank letter indicating account information Minimum of 2 pieces of supporting business collateral ONE of the following forms of business collateral for SITE SURVEY requirement (see below): 4. Previous processing statements 5. Pictures of exterior signage and interior inventory (HIGHLY RECOMMENDED NOT REQUIRED) 6. Utility bill showing DBA name and address Plus ONE of the following: 1. Another one of the above items 2. Copy of owner's driver's license 3. Copy of yellow pages ad 4. Bank statements with business name and address on it Valid trade references

5 RETAIL 2 MERCHANTS New Business: Less than $25k volume per month if start-up business Currently Processing* 80% card swiped Less than $1,500 average ticket Less than $5,000 high ticket Used Car Dealers Jewelry Stores Furniture Stores Kiosks Insurance Companies. Contractors Home Based Retail Car Rental Professionals (Lawyers, Doctors, Accountants) Limo/Taxis Retail 2 Retail Documentation Complete merchant application with account setup form Voided check or bank letter indicating account information Minimum of TWO of the following forms of business collateral for SITE SURVEY Requirement ( see below : ( 4. Previous processing statements 5. Bank statements with DBA name and address on it 6. Pictures of exterior, signage, interior and inventory (HIGHLY RECOMMENDED NOT REQUIRED) Plus ONE of the following: 1. Copy of owner's driver's license 2. Valid trade references (if applicable) 3. Additional recent processing statements or bank statements can assist with the approval of Retail 2 accounts * Yearly volumes and average tickets are best assessed with recent processing statements, processing, there are no caps when supported by recent processing statements and/or relevant

6 MO/TO and Internet-Based Merchants MO/TO/Internet merchants are established MO/TO and Internet processing accounts that are keying-in the majority of their credit card transactions. Most businesses falling under this category will be service businesses taking payments from customers over the phone for services rendered and invoices/statements received; mail order companies selling goods through the mail; and Internet businesses taking orders through the Internet. Recent processing statements, business business and/or guarantor can aid in the underwriting process. Personal credit is a factor in the approval process for this type of merchant. Merchants taking orders over the Internet may use a website shopping cart program with an Internet Gateway to process charges, a physical POS terminal or a PC-based authorization program. Address cart or ordering system support. Merchants taking phone or mail orders may also use an Internet Gateway, PC based authorization software, or a physical POS terminal to process their transactions. Any websites MUST use a secure backend database or Internet gateway for processing. Merchants that have a website without a shopping cart and use a gateway to key-in transactions, must submit a Virtual Terminal Gateway Addendum signed by the merchant. NOTE: In addition to the two pieces of required business collateral, MO/TO accounts will require a method of marketing (word of mouth and network marketing is NOT acceptable) and at least a minimum of 2 months recent processing and/or bank relationship. May require additional business collateral based on credit, risk, volumes, etc. For monthly volume caps on merchants, Electronic Payments may require further documentation such as merchant statement volumes of $1 Million or more in Visa/MasterCard transactions. Consult with ISO support for more details. *Many MO/TO and Internet-based merchants fall into high risk/unacceptable.

7 MOTO 1 MO/TO/INTERNET New Business: Less than $25k volume per month if start-up business Currently Processing* Must be selling a tangible product or service that is delivered within 30 days of billed for after the service takes place Less than $2,500 average ticket Less than $7,500 high ticket (Credit is a factor; Bank statements or prior processing statements can help in the approval process. Method of marketing must be supplied: website, brochure, catalog, advertisement, etc.) All Mail-Order Reprogram Accounts All Telephone-Order Reprogram Accounts All Internet Reprogram Accounts "Service Industry MOTO including Pest Control, Electrician, Plumbing/Heating, and Other Similar Contractors (no future delivery) B to B Electronics, Computers, Non-Tangible Products, see MOTO 1 or MOTO 3 Any additional paperwork submitted with the application can help expedite the approval process. Personal credit is also factored into the underwriting process. MOTO 1 MO/TO/Internet Documentation Complete merchant application w/account setup form Voided check or bank letter indicating account information Valid trade references Method of marketing (brochures, catalog, price list, website, advertisements, yellow page ad) Minimum of TWO of the following forms of business collateral for SITE SURVEY Requirement (see below): Previous processing statements 5. Bank statements with DBA name and address on it Plus ONE of the following: 1. Copy of owner's driver's license 2. Utility bill showing DBA name and address * Yearly volumes and average tickets are best assessed with recent processing statements,

8 MOTO 2 MO/TO/INTERNET New Business: Less than $50k volume per month if start-up business Must be selling a tangible product or service that is delivered within 30 days of billed for after the service takes place Less than $2,000 average ticket Less than $5,000 high ticket (Credit is a factor; Bank statements or prior processing statements can help with the approval process. Method of marketing must be supplied: website, brochure, catalog, advertisement, etc.) New Business Mail-Order Accounts New Telephone-Order Accounts New Internet Accounts Computers Electronics Jewelry Services Wholesalers B to B 1. Must Have a Valid Completed Website (if applicable). 2. Principal Must Have FICO Credit Score over 650. MOTO 2 MO/TO/Internet Documentation Complete merchant application w/account setup form Voided check or bank letter indicating account information Valid trade references Method of marketing (brochures, catalog, price list, website, advertisements, yellow page ad) Minimum of TWO of the following forms of business collateral for SITE SURVEY Requirement (see below): Previous processing statements 5. Bank statements with DBA name and address on it Plus ONE of the following: 1. Copy of owners driver's license 2. Utility bill showing DBA name and address A minimum of ONE of the following is required: 1. Minimum of three (2) months of prior processing statements 2. Minimum of two (2) months business bank statements Financial statements or tax returns can assist in the underwriting of MOTO 2 accounts

9 RETAIL/MOTO 3 New or Currently Processing Retail that does not fall into above categories Greater than $50,000/month in volume Greater than $2,500 average ticket and Greater than $7,500 highest ticket (Credit is a factor; Bank statements or prior processing statements will help in the approval process. Method of marketing must be supplied: website, brochure, catalog, advertisement, etc.) High Volume MO/TO/Internet E-Commerce Computers, Electronics Web Hosting Web Design Seminars Membership Other Higher Risk MO/TO/Internet and Retail Retail/MOTO 3 Unclassified Retail and Mo/To/Internet Documentation Complete merchant application w/account setup form Voided check or bank letter indicating account information Valid trade references Method of marketing (brochures, catalog, price list, website, advertisements, yellow page ad) Minimum of TWO of the following forms of business collateral for SITE SURVEY Requirement (see below): Previous processing statements Plus TWO of the following: 1. Copy of owner's driver's license 2. Bank statements with business name and address on it A minimum of ONE of the following is required: 1. Minimum of six (6) months of prior processing statements 2. Minimum of four (4) months business bank statements ements and/or tax returns could be requested by underwriting NOTE: Electronic Payments reserves the right to amend, change, or add to the above listed underwriting requirements and underwriting terms and conditions at any time without notice. Electronic Payments within its sole discretion reserves the right to decline any application at any time for any reason. Accounts meeting the above underwriting criteria can be declined at the sole discretion of Electronic Payments.

10 Site Survey Requirement Further Defined Site surveys are an important part of the approval process and are required by the bank. Most e; however, with larger accounts or higher credit risks, additional information may be required. Below is a list of several items, ALL OF WHICH constitutes information adequate for a site survey in addition to the sales agent s signature at the bottom of page two of the merchant application. Business license, tax permit, sellers permit, resolution, other o n Pictures of exterior, signage, interior and inventory Pictures can be sent in digital format or can be faxed in. Digital pictures can be sent to [email protected]. 1 month prior merchant statements (if conversion account) - all statements must be recent. 1 month business bank statements Tax returns Financials (audited not just a QuickBooks printout) Utility and/or telephone bill with DBA name and address Yellow page advertisement (on Retail 1 merchants) Is there or will there be additional information required? For most applications, the completed application, at least ONE applicable site survey item, a voided check and a photocopy of the signer's driver's license are.it is p It is possible that we may ask for additional information to assess the strength of an applicant. This is an overall guide of what we may ask for, and not an indication of the requirements for all applications. Financial Documents/Information Financial information may be required for those accounts processing large monthly and/or yearly volumes. Both t applicant business and the personal guarantor(s) are in question during the underwriting Business merchant processing statements Business tax returns for previous years Business balance sheet and income statement Personal tax returns for application guarantor(s) Business and/or personal bank statements

11 Marketing Materials Marketing materials prove that a business is operating under sound business policies and practices. More of requirement for MO/TO and Internet businesses, marketing materials that may be required to aid in the underwriting process are listed below: Completed website Merchant s return policies Brochures of the services/goods offered Newspaper or other advertisements showing use of business DBA name and phone numbers listed on the application Internet Account Underwriting Criteria The following is a requirement for Internet based merchant applicants. Merchants doing business solely on the Internet must conform to these policies. Merchants that are MO/TO and retail accounts not accepting orders through the Internet do not need to follow all of these procedures; however, a search of any website existence in the name of the business will be done and a WHOIS match will be performed. 1) Complete (Not Under Construction) Website A completed website must be up and running. It must contain the merchant s name, address, phone numbers and applicable shipping and return policies. Included in the completed website is the shopping cart program and/or systems used 2) SSL Certificate A completed website must incorporate an SSL (Secure Sockets Layer) about a card holder, including their card numbers, expiration date, and CVV codes, must be passed and then retrieved securely via HTTPS protocol. Orders placed via the web that are sent to a site administrator s are NOT ACCEPTABLE due to Visa CISP requirements. Electronic Payments must be able to see SSL certs, shopping carts and checkout terms, including conditions, return policies, shipping and contact information. *If a merchant is using a gateway as a virtual terminal, then we will need a VT addendum. No processing transactions through the site. 3) WHOIS Match A website s domain name must be looked up under the WHOIS system and a match must be returned matching the merchant s DBA and/or legal name on the application with the name of the registrant. A phone number and address must also match the WHOIS output or an explanation given why they do not match. 4) Viable Product A viable product must be offered for sale on the website, and must be offered for a reasonable price and under reasonable shipping policies. Future delivery cannot be more than 30 days.