What Underwriting Checks
Underwriting is the review an acquirer runs before it approves your merchant account. Visa's standards show what it checks and why it asks.
Before a bank lets you take cards, it looks at your business. This review is the merchant account underwriting process. It decides whether you get an account, and on what terms.
Visa's standards set out what acquirers must do at this stage. This walk-through follows what those standards say, so you know why each question is asked.
What underwriting is and why it exists
An acquirer runs this check before it signs you. Visa's standards say acquirers must develop a risk-based underwriting process for onboarding new merchants. The acquirer must look over its policy and process and bring them up to date from time to time.
Before it commits, it wants to know who you are and what you sell. It also wants to see how you run your business.
The risk-based approach
Visa's standards say acquirers must establish a risk-based onboarding policy that segments merchants into risk categories. Not every business gets the same depth of review. A policy that sorts merchants by risk lets the acquirer spend its effort where the risk is higher.
The standards also say underwriting checks where merchants and TPAs operate. It confirms they stay in allowed places and follow the rules there. So expect questions about where you operate and what rules apply to what you sell.
The same standards say underwriting done by machine often uses risk models. Some of these use artificial intelligence. A computer may score part of your file before a person reads it.
Identity checks: KYC and KYB
Visa's standards say acquirers must run KYC and KYB checks. The laws where you operate set the rules for these checks. KYC stands for Know Your Customer. KYB stands for Know Your Business.
The standards also cover the people behind the business. Acquirers get each owner or director's name, address, and government ID number. They also get an email and phone number.
For the business itself, the standards say acquirers get your business license or registration certificate. Underwriting also checks the seller's name, address, email and phone number. It checks the business registration and its documents too.
The standards say acquirers use Identity Verification Services. These tools hold up your details against other data to confirm who you are. So make sure your form matches your public records. Fix the details before you apply.
Creditworthiness and business review
Visa's standards say acquirers assess a merchant's creditworthiness by looking at credit history, financial statements, debts and public records.
They also look at your business plan and what you sell. They check how you deliver and how you take returns. Be ready to explain what you sell, how it reaches the buyer, and what happens when a buyer wants their money back.
The standards add two setup steps. Acquirers assign each merchant outlet an MCC. It is the code that best describes the business. They also give each merchant or TPA its own Card Acceptor Identification number. Your answers feed both, so describe your business the way it really runs.
Extra checks for e-commerce merchants
If you sell online, the review goes further. Visa's standards say acquirers collect and verify additional elements for e-Commerce merchants, including a listing of URLs the merchant uses.
The standards also say acquirers confirm that your domains and websites are in your name. Before you send in the form, make sure your domain is held in the same business name.
Processing history and the Terminated Merchant File
Your past matters. Visa's standards say a merchant's history of terminations, excessive chargebacks, fraud or illegal activity can affect the underwriting decision.
The standards also say acquirers must check the Terminated Merchant File before they sign a contract with you. If a past processor ended your account, expect it to come up. Answer the question straight, because the check happens either way.
Fraud, sanctions and screening
Visa's standards say acquirers must conduct fraud checks when onboarding a merchant.
They also say acquirers screen merchants against trade sanction watch-lists. The screening follows the laws that apply. It is not a mark against you.
The decision: approval, decline or conditional approval
Visa's standards say an application decision can be approval, decline or conditional approval with exposure mitigation strategies such as reserves or holds.
With a conditional approval, the acquirer says yes but sets limits. Those limits belong to the acquirer that sets them. Read them before you sign, so you know what you agreed to.
If you are declined, ask the acquirer what fell short. Some gaps, like a missing form, are easy to fix. Fix them before you apply again.
After approval: ongoing monitoring
Your file stays open after approval. Visa's standards say acquirers must adopt a risk management-focused monitoring strategy for their merchants from onboarding until partnership termination.
The standards also say AML checks must go on over time. They screen for sanctions, politically exposed persons and bad press. So the same checks that got you approved keep running while you process.
Keep your records current. Tell your acquirer when your business changes. The file it holds needs to match the business you run. If you sell by phone, read our page on billing authorization on phone sales.
To learn more, see why banks watch payment processors.