What should online business owners do when their bank closes rendering their merchant account is no longer functional

On a regular October Monday, a note on the front door of a Maltese bank said the branch was temporarily closed for “internal staff meetings”. The customers who waited outside trying to access to their accounts at the Sata Bank were only informed by an official notice posted on the bank’s website that their bank had been closed by the Malta Financial Services Authority. Just like that, merchants whose business had relied on routing payments including issuing refunds to customers, retrieving revenue and managing future chargebacks were left in limbo.

Once acquiring banks close, there isn’t very much that its customers, including merchants, can do. Financial authorities close failed banks without any advance notice, so by the time business owners are informed that their merchant account will be closed it is imperative to get another merchant bank account as quickly as possible.

The are no shortcuts, no guarantees, yet it can be done fairly fast. Ideally, the new acquiring bank should not carry the same risks as the previous one. But let’s address the bank failure aftermath one step at a time.