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  • Latin American Merchants, Boost US Sales In 30 Days With This Definitive Guide – Pt. 1

    Latin American Merchants, Boost US Sales In 30 Days With This Definitive Guide – Pt. 1

    Are you a Latin American merchants with a BIG need for processing? Having trouble getting sales from the US and Canada approved?

    Let’s face it – it can often be hard to find a good payment provider in places like in Mexico and Chile. It can also be expensive. If you operate a business in these markets, you know that Latin American payment processing is a complex issue. It is even more so for high-risk merchants in Central America, South America and even Caribbean countries.

    Firstly, diverse economies operate in this part of the world. Take a country like Chile for example. The GDP rivals that of North American countries. But, there are also LatAm countries like Columbia where the GDP is poor.

    Secondly, the region has a population of over 386 million people. It is on the verge of an e-commerce boom, despite currency and economic issues. This is in part due to the 73% internet penetration rate across LatAm. Smartphone adoption is increasing, and with it, the expansion of e-commerce. This also means that consumers want more convenient and secure online payment options.

    And that’s the purpose behind this blog article.

    We will look at the problems of Latin American merchants accepting e-commerce. We will also touch on how this affects the expansion of your business, and the solution to this problem.

     

    High-Risk merchant accounts are better for Latin American merchants

    You operate a high-risk business in LatAm and you want to increase revenues. You’re earning $75,000 per month. But you know it could be more. If only you could just improve payment acceptance, especially from North American consumers.

    Here’s the main reason why you should read this post. You’re facing challenges in securing credit card processing services. So, you can’t attract online payments, especially from foreign customers. You need a solution to this problem.

    If you haven’t considered expanding to the North American market yet, this is a good read to help you see why you should and how to make sure your customers can pay you easily and securely.

    Offering simple payment processing in Latin America is hard

    Latin American payment processing is difficult, especially for high-risk merchants. It is even more challenging selling from this region to foreign consumers in the US or Canada.
    Card payments are standard for buyers in Canada, the US, and Europe. For countries like Mexico, Guatemala, Belize, or Brazil, this isn’t the case. Debit and credit cards are not as widely used and many banks in the region don’t have the technology or speed to be able to accommodate high-risk payments especially if they are from regions outside of Latin America.

    Here are some reasons why.

    Access to and use of the financial sector

    As you’re probably aware a large percentage of the LatAm population do not use formal financial services. So, you face the issue of providing payment solutions for a large part of the population that does not use the formal banking system.

    Now, a few solutions were developed in LatAm for this reason. But they aren’t universally accepted across countries. Or work the same way. For example, Rappi is a popular on-demand delivery service that is popular in several LatAm countries. Unfortunately, Rappi in Columbia, Mexico, Brazil and Peru do not all accept the same payment methods.

     

    Technological challenges for Latin American merchants

    There have been plenty of advances in the financial sector. Yet, there are still some challenges. Some of these include outdated or clunking payment platforms. One example is Transbank in Chile which is described by many merchants as “clunky, slow, and incompatible with many cards.”

    Transbank is one of the many payment services across Latin America. But, most of the systems are incompatible across borders. So, like Rappi, what works in one Latin American country will not work the same in another, if it works at all.

     

    Acceptance of international payment methods

    Real-time payment processing is necessary if you want to expand your business. However, international credit card processing in most LatAm countries is a challenge. Most consumers don’t have an international credit card. Plus, when you operate in the LatAm market, it is easier to get credit card payments approved with domestic cards with local currency.
    The next issue is that most internationally recognized services aren’t available in Latin America. Or where they are available, you have to go through another processor or an aggregator to use them. This can cost you quite a bit in fees. In addition, your North American consumers might have difficulty in getting transactions approved if your bank is unable to accommodate USD or if the platform is too slow and times out transactions.

     

    A preference for cash

    Another problem is the preference for cash payment. This is tied to the low use of formal financial systems. This preference for cash payment has led to the growth of the voucher payment system. It is widely accepted and there are many local solutions to help customers pay using vouchers.
    But, while local customers prefer payment by vouchers, your international market will not.
    So, if you can’t accept international cards in Latin America, then that’s another obstacle to market expansion.

     

    High Processing Fees

    The local processors that may help you to accept international cards charge a lot. Their processing fees can even be up to 10% in some cases. This eats into your profit.

     

    Low Acceptance of High-Risk Latin American Merchants

    This is a universal problem and not at all unique to Latin America. Low-risk payment processors do not readily accept high-risk businesses. Plus, only a few acquirers will accept high-risk businesses due to concerns about risk.

    Now consider getting a processor that accepts high-risk businesses and international credit cards.

     

    It’s time to take your high-risk business to the next level!

    You want an offshore account in the US or Canada to grow your business and be able to successfully expand. If you’re tired of processing problems and need help with implementing solutions, contact us today.

     

    Handling local payment challenges

    Young adults are spearheading online payment processing in Latin America. They want convenience of online commerce. But security matters too. They also want certainty that the systems they are using to pay are secure.

    As an e-commerce store owner in Latin America, you’re already tapping into that market using your local payment solutions. This would include solutions like neobanks. They are some of the fastest growing options in the FinTech industry in Latin America.

    Plus, there have been growing investments in mobile credit card companies. These include Argentina’s Uala and Mexico’s Cuenca, and Albo. Brazil, one of the area’s largest economy, has Nubank, which has over 15 million users.

    Now, these are a positive step towards transforming financial services in Latin America. But if your target is North America, then these won’t help you to tap into the international market. Nor do they work for most online businesses.

     

    High-risk products and low-risk payment platforms do not mix

    There are multiple other local electronic payment and payment processing solutions. They are designed to be similar to those available to consumers in Latin America. Some of the popular ones include Brazil’s StoneCo and Pagseguro, and Mexican Clip (formerly PayClip). Again, they do not allow for international payment processing.

    Alternative payment processors like Stripe have now entered the LatAm market starting with Mexico. But it only processes local payments. It requires you to set up a business in the US to be able to access international payments. And while we do recommend that in some instances, it is better to set up a high-risk merchant account if you plan to go that route especially if you need your funds to stay within Latin America.

    These and other payment solutions do not readily support high-risk businesses. Like in North America, Square, PayPal and Stripe all support low-risk business categories. If you operate apparel, food and beverage businesses, it can make it simpler than if you are selling nutraceutical supplements or operate an adult website.
    But most Latin American payment processors do not have a large appetite for high-risk offers. Corporate ticket events or luxury goods are in this category. These high-ticket items can go as high as $10,000 per transaction. Therefore, if you offer mastermind conferences, you need high-risk merchant accounts instead. The same is true if you sell nootropics, diet or fitness subscriptions.

     

    Latin American merchants should consider the US and Canada

    Despite all the issues of accepting international payments, Latin American merchants should consider expanding to outward markets.

    • Better Delivery Systems: If you sell physical items – like supplements – then you know you need a reliable delivery system. This is one of the issues faced by local merchants. It is also why many consumers prefer cash on delivery. You have options for better delivery systems in North American markets.
    • More Acceptable Payment Options: The LatAm online banking and payment processing infrastructure is not as advanced as the US and Canada. This is rapidly changing as internet and smartphone penetration increases. But even so, it’s important to convince consumers of the security of your payment processing methods.
      As such, most merchants opt for services like Stripe and PayPal, which have a strong reputation worldwide. But, you run a high-risk business. These won’t last because they prefer to work with low-risk businesses.
    • Increased revenues: Most of all, with the expansion outwards, you have access to higher revenues. North America is a consumer market. Get in on the action.

     

    Best processing options for Latin American merchants

    Talk to any high-risk merchant based in Latin America and you will hear horror stories! One example is entrepreneurs who operate Forex sites. Another example is adult webcam or similar adult entertainment networks. Even better Paleo or Keto supplement sellers. They will reveal the challenges they faced getting a payment solution.
    But all is not lost.

    You can generate more foreign revenue for your online business, even if your headquarters are in Columbia or Argentina. The process isn’t easy. But it is well worth it in the end.

    Want to know what it is? Get an offshore merchant account. Offshore processing is a WIN for high-risk merchants in Latin America

    North American merchants entering the Latin American market must offer the preferred local payment options. These include accepting:

    • cash/voucher payments;
    • enabling bank transfers; and
    • processing domestic debit and credit cards.

    Latin American merchants wanting more US sales need a merchant account that can accommodate sales in those regions. Offshore processing will take time to set up. But, payments will run much more smoothly.

    You will need to offer the preferred payment methods for North Americans. This means an offshore payment option for Latin American merchants can help you overcome local banking hurdles.

     

    This is the end of part 1, but there’s more tips and advice ahead

    Our next post in this series will dive deep into why going offshore is the best solution and how you can do it.

    We have seen how doing this has worked wonders for our Latin American clients. They established offshore accounts and quickly increased their revenues as well as being able to sell in the US, Canada and several European markets. You can do the same. If you’re ready to expand beyond your borders, then we should talk.

    No one knows offshore merchant accounts better than DirectPayNet. We are experts at helping you grow with the right payment solution.

    Contact DirectPayNet to start increasing your US and European sales!

  • Bad Merchant Services Horror Stories – And How to Avoid Them…

    Bad Merchant Services Horror Stories – And How to Avoid Them…

    In our 10 years of operation, DirectPayNet has heard its share of horror stories about bad merchant services and the companies that promise unrealistic solutions.

    Merchants in high-risk verticals can be so desperate or eager to scale, they forget to conduct due diligence on their merchant account or payment solution provider. Unfortunately, they resort to signing with merchant account providers who lack credibility and are straight up fraudsters. Yet many entrepreneurs fall into the trap.

    Sometimes news headlines often focus on scams by merchants. But there are plenty of stories about bad merchant account providers.

    If you sense you aren’t getting what you need from your current payment facilitator, there’s a good chance something is off.

     

    Horror stories emerge detailing the practices of bad merchant services

    There have been increasing instances of poor – and in some cases illegal – practices when it comes to providing merchant services. One of the most common practices is pretending to be a licensed partner with an acquiring bank or credit card company.

    By offering cheaper rates than what merchants currently pay, many business owners are convinced to sign up.

    But often there is an overflow of undisclosed rates and fees. Merchants unknowingly commit to 12, 24, and sometimes even 72-month long contracts. It’s only after they start processing do merchants realize they’ve signed up for a bad deal. Then, they are charged severe early termination fees (e.g. $600) to get out of them.

    These providers deliver skeleton services for astronomical prices. A lack of attention paid to chargeback management leaves victims high and dry with too much risk.

    Signing up with some of these quick-fix credit card processors can be a one-way ticket to a MATCH-listing too.

    In worst-case scenarios, bad merchant service providers can literally disappear overnight. Taking a merchant’s money with them. It’s not usual for them to then appear with a new name a few months later.

    With such possibly disastrous results, it’s crucial that you look for the telltale signs of a payment processor worth their salt.

     

    Do you realize that there are several ways merchant rates can spike above the ones advertised when you first signed up? Click here if you want to learn from our expert team on how to find the best rates for your business!

     

    The Telltale Signs of a Good Merchant Services Provider

    It pays to do your due diligence before signing up with any service providers of this nature.

    Here are five telltale signs that your payment processor provides what they claim they do:

     

    1. Merchant Portal Login

    This is something that should be provided by the acquiring bank behind the merchant account. Once inside the portal you should be able to view real-time reporting of transactions. Without the ability to do so, you have no way to manage your chargeback and fraud ratios.

     

    2. Monthly Processing Statements

    All reputable processors provide at least weekly or monthly processing statements. If they don’t, you won’t have any processing history to fall back on should the worst happen and you need another merchant account fast.

     

    3. Frequent Payments

    One of the best signs of a good processor is frequent payments. You should receive them at least weekly if you’ve got decent processing volumes. The worst providers are notoriously slow at handing over money. In some cases, they never do and disappear with your money in the process.

     

    4. Good Public Reputation

    In the current world of fake news and reviews, you need dig a little deeper into the provider in question. Head to a trusted resource such as the Better Business Bureau. Reputable business with have a profile and good rating with them. Devious providers registered with these types of agencies can’t keep their noses clean for very long.

     

    5. Dedicated Customer Service

    Another huge indicator of a payment processor’s credentials is their customer service. Do you have a real, local telephone number that you can call and speak to a real person? Does their company exist? Do they respond to emails? If you can’t get in contact with customer services, it’s probably a good idea to steer clear.

     

    Merchants can protect their business from poor merchant service providers

    In some instances, merchant account providers can pass your initial checks. Yet you still feel something isn’t right. If this is the case then here are some strategic steps to protect your business.

    Firstly, constant communication is key. Pick up the phone once a week to check in. It will give you peace of mind that your provider isn’t going away anytime soon. It’s also helpful for them to be kept abreast of any changes that may be taking place within the business. When rocky times hit, you need your service provider to get in the trenches with you. If they’re never available, find a new supplier.

    Next, consider diversifying your bank relationships. Don’t throw all your “eggs” in one basket. By having a back up or a few back up merchant accounts to support your offers, you prevent bottlenecks caused by a being suspended or shut down.

    Fraud and chargebacks are your worst enemy when it comes to keeping merchant accounts healthy. Leading banks and card networks are working with merchant service providers to provide state-of-the-art anti-fraud tools.

    If your provider can’t facilitate these tools, it could be a sign that you don’t have good support.

     

    Merchant services providers don’t always deliver on their promises

    High-risk merchants are often swayed by the promises of less expensive fees to process debit and credit card transactions. However, they can often sign themselves into hidden prices, deceptive contract terms, and a skeleton service that leaves their business open to huge risks including account termination.

    It always pays to undertake due diligence. Focusing on customer support levels, public reputation, and access to key real-time information. Similarly, if a provider is beginning to hold on to payments for lengthier periods of time, it could be a telltale sign of what’s to come. You need to take action before the worst happens.

    DirectPayNet uses it’s expertise to create strategies for clients with merchant accounts that are on the brink of a shutdown.

    We are also experts in securing more affordable merchant processing rates for your business that you can trust.

     

    Call us now to improve your payment processing before it’s too late!

  • Choppy Waters Ahead? Recession Fears Mount For High-Risk Merchants Ahead Of Q4 Holiday Shopping Period

    Choppy Waters Ahead? Recession Fears Mount For High-Risk Merchants Ahead Of Q4 Holiday Shopping Period

    More buying happens in the Q4 holiday shopping season than at any other point during the year. This makes it an opportune time for high-risk merchants to cash in on the consumer shopping spree.

    From Black Friday deals all the way through to Christmas and Boxing Day, merchants across a range of industries are looking to grab a slice of this over-sized consumer-spending pie.

    But, despite records last year, the outlook is certainly a lot less rosy this time around. Fears of a recession in the first half of 2020 (which may creep forwards into the back end of 2019) have spooked merchants who depend on this time of year to flourish and prosper.

    Recession fears aside, the increased sales over the next three months will open the door to fraud, chargebacks, and refunds.

    No company wants the busiest time of year to negatively impact their merchant account or other payment methods. So here are several tips to reduce risk and recession-proof your Q4 sales this holiday season.

     

    Global recession fears heading into Q4 2019

    What happened in late August 2019 has spooked economists and financial analysts across the globe. The US bond market displayed an inverted yield curve on 2-year and 10-year bonds for the first time since 2007.

    What does that mean?

    It describes the situation whereby investors can receive higher yields on short-term debt (2-year bond) than on long term debt (10-year bond). This is usually taken as a sign that long-term prospects for the economy are bleak. Thus, a recession is likely on the horizon.

    Why do financial experts care so much about a yield curve inversion?

    Well, every yield curve inversion has been shortly followed by a recession over the course of the the last 70 years. So, it’s fair to say that it’s an accurate predictor of future market conditions.
    The negative headlines associated with a potential impending recession may keep wallets in pockets for longer when it comes to Q4 spending.

    However, it’s not all doom and gloom. A yield curve inversion for 2-year and 5-year bonds in late 2018 wasn’t enough to stop a 2.8% year-on-year rise in consumer spending for Q4 2018. Proving that the fourth quarter is a great time to capitalize on higher consumer spending.

     

    Prepare your business for the Q4 spending surge

    Merchants are often unprepared when it comes to the uptick of sales during the holiday shopping period. To succeed, the entire sales cycle must have support to cope with the increase in demand.

    One element out of sync can bring the whole operation crashing down. Also, merchant account termination can happen if fraud and risk go above acceptable card network levels.
    Visa has recently revised their risk profile for merchants. As a high-risk merchant, you may be vulnerable to recession fears, as items you sell are deemed luxury or impulse buys. So, be prepared!

    Over the next 30 days, here’s what you need to be paying attention to as a medium and high-risk merchant. These four points will ensure a profitable Q4 with great profits and minimal losses due to fraud.

     

    1. Website

    Your website’s functionality can make or break an entire transaction funnel. In today’s digital age, multiple languages and currency options are a must.

    And yes, it’s important to ensure that desktop versions of the website function properly. Test and review each browser to ensure your website looks good on each one.

    Special attention must be paid to mobile versions too (in various formats as screens can vary widely between devices). Mobile search has overtaken desktop search for the first time, and when it comes to online retail, mobile traffic accounts for 67% of sales in Europe and 59% of sales in the US. Not having seamless mobile functionality could see merchants lose out on critical sales volumes.

    Finally, both your desktop and mobile checkouts should be as simple as possible and secure with an authentic SSL certification. This is especially key when using new anti-fraud tools like PSD2 and 3DS2 authentication protocols.

    The less friction during the checkout process, the higher your conversion rates will be.

     

    2. Order Fulfilment

    Often merchants focus their efforts entirely on increasing sales without much thought given to fulfilment.

    A total of 80% of holiday shoppers want their orders shipped on the day of purchase. Yet, only half of retailers are in a position to do so.

    When purchased items don’t arrive on time customers rush to ask for refunds or chargebacks. High chargeback rates are the leading cause of US merchant account terminations. So, speed is everything when it comes to your fulfilment process.

    Some customers may even be willing to pay more for an item if shipping times are better than from other merchants.

     

    3. Anti-Fraud, Anti-Chargeback, and Anti-Theft Measures

    The increase in sales during this period will increase the likelihood of targeted fraud, scams, and theft of data via cyber-attacks. Merchants need to keep a much closer eye on transactions during this period, especially higher-priced items susceptible to friendly and chargeback fraud.

    Ways to counter this include blocking IP addresses from high-risk countries (even if it’s for a few months). If you can’t fulfill an item in a reasonable amount of time to a specific country, make sure to block it to avoid potential chargebacks from fraudsters or customers who get impatient waiting for their item. Merchants should also make address verification services (AVS) and CVV or CV2 mandatory on order pages.

    Another tactic is using anti-fraud tools at the CRM or payment gateway level to suspend or cancel sales that look suspicious right away to protect your payment-processing channel. A daily review of sales can be helpful in diagnosing fraud. Enlisting the anti-fraud tools in the gateways provided by acquiring banks is a good idea to up security during this busy period, as is investing in your cyber defenses.

    Many criminals wait for the chaos surrounding retail events (like Black Friday) to strike when merchants are too preoccupied to react effectively. They also wait for staff members to go on holiday so there is a weaker line of defense.

     

    4. Customer Service

    Buyer’s remorse often happens right after a sale. But, it is much more prevalent after the holiday period, particularly when credit card bills are received in January. Therefore, after-sales support takes on a new level of importance.

    By providing excellent customer service with extended hours to accommodate your customers globally, high-risk merchants can keep those worrying chargeback ratios down to acceptable levels.

    Have a generous refund policy to ensure your customers don’t feel pressured to chargeback. Consequently, now is the perfect time to revisit your terms and conditions. Make sure the number of days for a refund is unmistakably clear to buyers purchasing from you.

    Give customers multiple ways to contact customer support. Make email addresses, ticketing systems, phone numbers and live chat bots easily accessible.

     

    Is your business already recession-proof for the 2019 Q4 period?

    Do you need to integrate a new payment option immediately for this holiday shopping season?

    Email our sales team now to get a fast solution.

     

    Diversifying payment methods is key to Q4 Success

    Many businesses are happy to accept credit card orders. Yet, changing consumer attitudes are forcing merchants to provide alternatives. Recent research shows that debit cards and cash are still favored over credit cards by many consumers who want to avoid debt.

    PayPal succeeds in this area because they allow consumers to debit their checking accounts for a purchase. By offering a range of payment methods, online vendors can stop losing out on customers who would prefer not to pay by credit card.

    But the benefits of offering multifunctional checkouts don’t just extend to the consumer. Merchants wanting an alternative to PayPal for their high-risk offer should use direct debit options such as ACH processing and e-checks.

    These payment methods can be lower cost thus maximizing your revenue and potentially leaving you with more volume for your high-risk merchant account. Better still, chargebacks are harder to initiate for customers using these payment methods. The benefit to you is that ACH and e-check will improve your payment processing ratios.

    The holiday shopping season is about to begin. So, it makes sense to negotiate merchant account terms and alternative methods for payment now instead of in November. Leaving it too late will negatively impact both your sales and your existing merchant account status by opening yourself to potential threats.

     

    Timing is everything, especially for supplement and info product offers

    The holiday shopping season slowly inches ever closer to the end of summer each year. Therefore merchants should adapt accordingly.

    Consumers are looking to Black Friday to secure early discounts before the festive sales season really get underway. Thus, companies selling either high-ticket luxury items or consumer electronics should make suitable preparations to avoid the aforementioned pitfalls of poorly planned fulfilment demand spikes.

    But timing has an effect on all type of high-risk merchants, not just online retailers. Those who sell digital info products should push products during October and November, and then scale back in December.

    Purchases made during the last month of the year often fall foul of January’s elevated chargeback rates, which can run at more than double the proceeding December’s. For the same reason, subscriptions should be avoided during the last few months of the year, or should be limited to three months or less from August onwards.

    Try offering bundles of products for 3 or 6 months which will increase your sales value but lower the risk of chargebacks due to unwanted subscriptions and surprise charges on your customers’ credit card statement. Waiting for the New Year to launch (or re-launch) subscription services is a good idea since many customers are keen to try new supplement products and services during January as part of their New Year’s resolutions.

     

    We will help you recession-proof your Q4

    Financial analysts predict a global recession is potentially closer to fruition than first thought. It’s crucial for merchants to squeeze the most out of the upcoming Q4 holiday shopping season. Specifically for October and November depending on your product type.

    With well-timed preparations, businesses will protect their revenue. They can also offer more than one payment option. Improving payment-processing capabilities reduces associated risks (such as chargeback fraud). High-risk merchants can begin to build enough trust with their providers to upgrade the terms of their merchant accounts.

    Within the last ten years DirectPayNet has helped hundreds of medium and high-risk merchants transform their payment-processing funnel. Whether it’s credit card orders for consumer electronics, supplements, luxury goods or even info products, we are committed to your expansion and success.

    We help entrepreneurs like you navigate fraud. We also help you manage your merchant account through sudden fraud events common during Q4.

     

    Contact us today to prepare your business the right way for the Q4 holiday shopping season!