… and why does it matter?
Any business that wishes to open a merchant credit card processing account must complete and sign application paperwork, which is submitted to an acquiring bank for underwriting before the account is approved. On a typical application, businesses are required to disclose some basic details about their expected volume: monthly sales, average transaction size, the time between the purchase and delivery of goods, etc. One of the questions that stumps businesses the most when completing this section is “what is the highest ticket?”
A High Ticket is the largest dollar amount a customer might pay for goods or services from your business in a single credit card transaction. An established business can deduce this figure based on their previous processing history, but a new business will have to estimate it. This is an important metric on your business’ merchant account. If you request an amount that is too high, and perhaps unrealistic, your merchant account may be held up for additional financial review, or it may be denied. If you are unsure of a realistic amount, a good rule of thumb is to err on the safe side and estimate your highest ticket to be about 10 times the average ticket amount.
The processor sets the highest limit they will allow for a single transaction through the account based on the High Ticket. If a transaction exceeds that limit, it has the potential to be held and investigated to ensure it is not a fraudulent charge. The processor may request an invoice or other documentation from the business in order to verify the transaction’s legitimacy before funds are released. In the worst case scenario, the transaction may get denied for funding altogether. Getting the High Ticket right will help to avoid these extra steps, and a good partner (like MSP) can help you adjust your High Ticket easily as your business needs change over time.