Can I Use Someone Else’s Account to Process My Payments?
Never. This is known as credit card laundering or factoring, and it is expressly prohibited by banks and credit card companies. You could face hefty fines or, in some states, criminal charges if caught. The person processing payments for you is likely to lose his or her merchant account, and you’re likely to be banned from getting one in the future.
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Companies that are tempted to do this usually have had trouble getting a merchant account, whether they have a history of bad credit or excessive charge-backs. Banks and credit card companies evaluate credit history before approving merchant accounts, and sometimes they say no. As frustrating as it might be if you’re having trouble opening a merchant account, credit card laundering or factoring is never worth the risk.
If you’re having trouble getting a merchant account, there are several options. Invest some time and energy into cleaning up your credit. Pay off old debt, pay your bills on time and dispute any incorrect information in your credit report. Or, look for a bank or credit card company that will approve your merchant account in an exchange for a large opening balance. Banks just want to minimize risk, and a willingness to put up cash provides them some comfort. If the answer is still no, wait it out. Waiting several years for a merchant account is better than accepting credit cards illegally and losing your ability to have a merchant account for life.