If a merchant processing bank fee or charge is ever returned for insufficient funds, the processing bank will become concerned. Their reasoning will be that if the merchant doesn’t have coverage for a small fee, how would they be able to recover from a large potential chargeback?
In an effort to fight the rise of risk, banks and underwriting departments are increasingly scrutinizing any vulnerabilities. This often results in funds being held, or even worse; your account may be terminated. If your account is terminated, you will be put on a list called “TMF” and you will not be approved for a merchant account for at least 7 years!
Always be sure to keep extra funds in your processing bank account for merchant processing bank fees. It will keep your establish your account as more credible and trustworthy to the banks.