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We recently had a merchant who told us on their original application that their maximum transaction amount would be $5,000.00. Then, they ran a transaction for $60,000…yikes! Because the sale was over ten times the high ticket amount reported on their original application, this set off a big red flag in the system, and these funds were held by our underwriting bank. To learn more about account parameters and how to avoid funding holds on large transactions.
When signing up for an account with Dharma, we ask you to share your expected annual processing volume, average ticket amount, and maximum ticket amount to the best of your availability. This is to get a big picture of your account and set appropriate expectations. The higher the volume, the higher the risk for our underwriters. Our underwriting bank takes the information you provide and sets account parameters in the system. If the system catches something out of the norm, such as a really large single transaction or a huge increase in your daily volume, it will set off a possible fraud flag, and the funds will be held. We then request an invoice in order to verify that the transaction is legitimate by checking the cardholder’s name and billing information against what’s on file with their bank. If the information doesn’t match up, we might have to reach out to the cardholder directly.
Although we understand how frustrating it can be to not receive expected funding, we offer an alternative perspective that the underwriting bank holds these funds for your protection, as well as theirs. To share a recent story of a funding hold working in favor of a merchant – we had a merchant accidentally run a $200 sale with a few extra zeroes at the end of the total, accidentally running it for $20,000. Luckily, the system caught this ahead of time, and we requested further information about the sale. The merchant saw their mistake, and they were able to avoid a very costly and embarrassing situation with their customer.
In order to avoid any surprises, please make sure to be aware of your processing parameters, and let us know in advance if you are going to run a transaction that is larger than your max ticket amount. If your parameters change as your business grows, we totally support you!! Just let us know so we can adjust the expectations accordingly. If it’s a big change, our underwriters might request business financials in order to support the higher processing parameters. The key is communicating – as long as we know what to expect, we can protect you against fraud and support your account in the best way possible. Plus, we can make sure you get your hard earned money deposited quickly!