What is underwriting and why is it done?

When you apply for a merchant account, your application must be approved by an underwriter. Underwriting is the process by which acquirers verify the identity of individuals, entities, and financial accounts, and assess the risk associated with each merchant business. Because merchant accounts are regulated like bank accounts, your acquirer must perform these checks in accordance with regulatory requirements.

Acquirers are financially responsible for every transaction processed through the merchant accounts they issue. As a result, your acquirer will carefully assess any risk factors that could pose a financial or regulatory risk to your business — which, by extension, is a risk to them.

Your acquirer must also confirm that your business and website comply with Visa and Mastercard rules and best practices. It's not uncommon to be asked to make changes to your website before your account is approved, because card scheme rules are comprehensive, and the requirements aren't always obvious.

Not a CardCorp merchant yet? Visit our website for merchant account pre-approval and a custom price quote for your business. And chat with our payment experts for a free assessment of the risk factors that may be in scope for your business.