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  • Top Sneaky Ways Most Banks Jack Up Your Merchant Processing Fees (Without You Ever Realizing It)

    Top Sneaky Ways Most Banks Jack Up Your Merchant Processing Fees (Without You Ever Realizing It)

    So you got pre-approved to accept online credit card orders and are considering the merchant processing fees in your contract. One payment processor is offering you 1.95% and the other is offering 3.95%. Which one should you choose?

    The first processing statement often comes as a shock to most merchants that start accepting credit card orders. When they sign an agreement they think only a small percentage of sales will be shared if they opt for a 1.95% rate. It turns out it’s more complicated than that.

    We’ve seen this with a lot with our newer clients. A lack of knowledge about fees and charges can impact profit margin. This is especially true when merchants sell price-sensitive items or have lower margins such as Forex or crypto exchanges. Part of the issue stems from only focusing on the percentages.

    For example, merchants look at the rates of 1.95% versus 3.95%. Because the latter is higher, they assume that monthly fees will be more costly. But that’s not always the case.

    Also, there’s more fees applied to a merchant account besides credit card rates. So, to help you understand all the fees you should consider, this post will cover:

    • Why merchant pricing varies;
    • The models for merchant rates;
    • The extra fees in your merchant account; and
    • How you can lower those credit card processing rates

    Before we get started, a note about predatory merchant services providers.

     

    High-risk merchants will face higher fees

    Businesses classified as high risk operate in industries that tend to have higher-than-average fraud or chargeback rates. Alternatively, they might be in an industry with reputational risk like adult dating or cam sites, or biz op. As such, merchant service providers are taking on extra liabilities by allowing you to accept card payments. The fees charged help them offset the costs and risks of doing do so. Your payment processor is on the hook for refunds and chargebacks if you cannot fund them or you go out of business.

    These fees can at times amount to double what low-risk businesses pay. But being in a high-risk industry doesn’t mean you should be treated unfairly. And that’s what some merchant service providers (MSPs) do.

    Some MSPs know it’s difficult for you to get a merchant account. As such, they often offer unreasonable terms that make it difficult for you to turn a reasonable profit after all their fees are considered.

    Alternatively, some merchants believe they are getting a merchant account, but what they really are getting is a gateway. In the end, they have no portal to log into and no access to daily performance stats. Real-time data is crucial for keeping abreast of chargebacks and fraud.

    Unfortunately, you don’t know this until after you’ve accepted their quick sign-up, no questions asked application. Several weeks later, they review your business model. And after reviewing your sales activity, they often terminate your merchant account. Or, instead of shutting down your account they allow you to keep processing while you pay inflated fees and rates.

    You may choose to take the road of opening an account with PayPal or Stripe. These options offer reasonable rates and terms, plus they are quick to open the accounts. But, when a business sells risque products (like supplements, business education, fitness downloads) and attempts to scale, these low-risk processors shut down or freeze accounts overnight. Furthermore, they hold funds while they assess business activity, which sometimes take months.

    So, merchants need to understand the fee structures and merchant pricing models to make better choices.

     

    The costs of doing business with credit card processing

    Credit card processing fees are a necessity. After all, the various companies involved in the process must make money to justify the cost of helping merchants like yourself get payment facilities.

    Some fees are one-time fees, such as set-up or technical integration fees during the onboarding process. The bank’s underwriters, risk and technical integrations staff need to be paid for the upfront work they do for you. Other costs are recurring and payable either monthly or annually.

     

    So, who needs to get paid?

    As a business, you’ll pay to three separate fees and entities each time you accept a credit card payment:

    1. Interchange fees – paid to the bank that issued the customer’s card
    2. Assessment fees – paid to the card association, e.g., Mastercard, Visa. These companies set the rules for accepting payments with their cards.
    3. Processor markup – the fee paid to the merchant services provider that manages your credit card processing

    The interchange and assessment fees are classified as the discount rate and are generally standard. The processor markup fee is variable. So, the aim is to find the company that offers the lowest markup. It is also important to work with a partner that understands your industry and can be flexible if there are a few bumps on the road such as a few high chargeback months or delays in obtaining PCI compliance. Pricing is important although, if you are operating a supplement business for example, having a flexible and understanding payment processor may be worth a higher fee. As a general rule, if the bank is making a nice margin to cover their liability in the event of affiliate or other fraud with your business, the more likely they are to be understanding if an issue arises.

    How are you being charged?

    There are three pricing models available for merchant accounts. These are different ways of calculating credit card rates for banks and payment providers.

    • Interchange Merchant Pricing

    Interchange plus is essentially a pass-through pricing model. A payment sales office will charge interchange fees at cost and then add their markup separately for their margin.

    The fees do vary based on whether the customer makes purchases online or over the phone. They also vary based on the type of card used. So, the interchange and assessment rates will differ month to month based on the type of transaction and a variety of other factors. Domestic debit cards carry much lower fees than say a foreign business card. As such, if you’re selling mainly consumer products, this type of pricing may be most beneficial for cost savings as your interchange cost for debit and low rewards consumer cards will typically be under or close to 1%.

     

    • Flat Rate Merchant Pricing

    This is the simplest of the models to understand. You are charged one flat rate for the interchange and assessment fees.
    So, for example, you may see a rate of 3.75% + $0.15. The percent covers the credit card interchange and assessment fees. The $0.15 is a fee per transaction, some can charge a lower fee for declined transactions vs approved.
    However, you may end up paying more on a flat rate than the interchange plus model if most of your transactions are consumer credit or debit. Some transactions attract lower fees than others. If you’re paying a flat rate for all transactions, you do not get the benefit of the lower rates.

     

    • Tiered Merchant Pricing

    This model bundles all costs and categorizes credit card transactions in 3 tiers.
    The processor pays the assessment and interchange fees on your behalf and then charges your business based on levels it creates. The levels are labeled as qualified, mid-qualified, and non-qualified. Qualified tier offers the lowest charge and the non-qualified the highest. The merchant service provider typically categorizes low reward and debit cards as qualified, higher reward or cash back cards as mid-qualified and business or foreign cards as non-qualified.

    Want to slash your merchant processing fees by up to 3%? Email DirectPayNet today and find out how much you can save!

    You aren’t paying attention to these other credit card processing fees and costs

    There are other costs associated with accepting card payments besides the discount rate and the MSP markup. Below are five types of fees added to your processing statement each month.

    1. NABU & APF

    NABU and APF are part of the assessment fees. Mastercard’s Network Access Brand Usage (NABU) fee is a charge for credit card processing through Mastercard’s network. APF is Visa’s Acquirer Processing Fee, also known as the Visa Authorization Processing Fee. These fees are usually passed to merchant and are a few cents per transaction.

     

    2. Chargeback Fee

    This is the fee paid to your payment provider if a customer dispute results in a chargeback.Keep in mind that your customer’s bank has already charged your payment provider a fee for a chargeback. Your provider refunds the customer’s funds on your behalf and charges a fee for this. It ranges between $20 – $40 depending on your risk level. Note that only low risk merchants get the luxury of paying $20 per chargeback.

     

    3. Representment Fee

    When a merchant receives a customer dispute for a transaction, they have the choice of challenging it. If you fight or dispute a chargeback, you are required to pay a representment fee.

     

    4. PCI Non-Compliance Fee

    Card companies set the Payment Card Industry Data Security Standards (PCI DSS). Some processors charge a PCI fee to cover the cost of maintaining compliance or if you fail to adhere to the standards.

    With a bundled fee, you might miss that you’re paying for this. Check your statements to verify. You only need to pay this fee if not PCI-compliant. If you are compliant, then this is one of the fees you can get rid of. Contact your MSP to ask about getting your PCI non-compliance fee removed.

     

    5. Merchant Reserves

    As a high-risk business, it’s more than likely that your payment provider will hold a merchant reserve. This occurs when a share of your sales are set aside to pay for unexpected expenses. It can be useful if you go out of business or if chargeback and refund requests surface (as the bank does not want to pay for that liability).

     

    We’ve provided a cheat sheet on lowering merchant account reserves. Take a read.

     

    The reserve requirements may decrease over time. But, if badly managed in the initial stages of your business, you might face cashflow problems. Thus, budget for at least a 10% reserve from some platforms. Others may hold your funds for 6 months, while some processors keep funds for 3 months. Asking your provider to cap the amount of the reserve will ensure to free up your cashflow as you scale.

     

    Lowering your merchant fees

    You cannot escape from paying merchant processing fees. But you should understand what they are, why they exist, and how you can lower them.

    Flat rates are generally more costly if you accept local payments via your domestic merchant account. But, you will have room for negotiating card processing fees with an interchange model or tiered pricing.

    Remember that banks and payment service providers must get a percentage of your revenue to operate their business. They must also cover liability for allowing you to use their payment platform. So, don’t be unrealistic in your expectations of the discount you can receive.

    Prevent non-compliance fees by becoming and staying PCI compliant. Steps you can take include integrating 3DS to reduce chargeback and chargeback representment fees. A tool like 3DS is a great option, especially if your price points are extremely low. For example, $4.99 on an initial trial subscription offer requires an anti-fraud measure, because you don’t want to pay $35 for a chargeback on this transaction.

    Also, consider getting offshore merchant accounts. When it comes to Interchange fees, territories will differ. For example, on average, EU interchange fees are lower than North America’s. But in North America, Canada is higher than in the USA. These are some of the little nuances that a merchant account support services company can help you with.

    Other ways you can look to reduce your risks and thereby lower your fees include:

    • Outsourcing to chargeback management companies to reduce chargeback and fraud rates;
    • Using machine learning by adding anti-fraud tools to the backend of your website; and
    • Beefing up your refund policies to give customers freedom to get their funds back if they are unsatisfied with your product or service. This is especially important for high-risk merchants such as those selling supplements, business opportunities or high-ticket luxury items.

     

    Where do you go from here?

    Merchant processing fees are quite complicated. So, make sure you understand the costs associated with accepting credit card payments so you can budget for these added expenses.

    With careful management and favorable fraud ratios, you can lower them over time. Plus, you can start on the right foot when you choose the right payment processor. Pay attention to the terms in the contracts and read the fine print. Understand the pricing model and payment structure before you sign an agreement.

    Getting cheap pricing is possible, but ask yourself this question: “What you’re getting for that money?” Take advantage of companies like DirectPayNet that operate in the high-risk community. They understand your struggles and know how to help you find the best solutions.

    DirectPayNet provides payment strategies that can help you maximize your conversions globally all at an efficient rate. We also help our clients with merchant accounts that are on the brink of a shutdown. We can help you avoid bottlenecks that occur by relying on one solution for your business.

    If you are ready to get more affordable merchant processing rates for your business, now is the time to contact our sales team.

    Email DirectPayNet today to see how much money we can save you. 

  • Asian Payment Processing: Hong Kong and Singapore Merchants Struggle to Gain Footholds in International Markets

    Asian Payment Processing: Hong Kong and Singapore Merchants Struggle to Gain Footholds in International Markets

    Global payment solution providers like Stripe have only just entered the market in these jurisdictions. But, because they are unfamiliar or don’t like high risk, merchants have been charged extortionate fees. Costs that erode profit margins for online retailers based in this continent.

    Many Asian merchants struggle with declined transactions taken through their online stores for customers in Europe or the US. As a result, they are unable to scale globally. In addition, this limits their website’s scope to small Asian markets for in-demand products such as consumer electronics.

    However, there are bone fide ways to target new markets with the ability to process international payments. This post will explain how you can achieve higher approvals for US, UK and European credit card transactions. We will also show how to expand your business into foreign regions.

     

    It is difficult to get merchant accounts without a presence in the region

    Asian merchants in particular struggle to get approved for merchant accounts for several reasons. They often have no physical presence in the jurisdiction they are applying for and no bank account within that same region. So, they rejected out for US and European merchant account providers. Also, many companies can’t produce verifiable know-your-customer (KYC) documentation required for acquiring banks’ anti-money laundering checks.

    What do you get when you couple high-risk business models (e.g. subscription) in industries known for payment risks (high ticket or luxury items)? The answer is excessive risk. And, it becomes clear why many Asian merchants struggle to gain acceptance.

    Without merchant accounts, online vendors from Hong Kong and Singapore struggle to accept credit card orders in foreign currencies such as USD, GBP or Euro. As a result, they delay or cancel any notions for international expansion.

    Racking up declined transactions thanks to foreign consumers’ banks’ anti-fraud measures is commonplace. For example, a cross-border purchase made in Hong Kong or Singapore dollars look very suspicious to an American bank.

    Therefore, Asian merchants with online businesses must invest heavily in their websites, offering multiple languages and currencies for customers. If you want to make a good impression ensure you have telephone numbers easily accessible for each region such as an 800 number in the US, a comprehensive refund policy, and clear terms and pricing on your website. These elements meet compliance standards of international card networks such as Visa. It will also improve your chances of securing an offshore merchant account.

    Once you’ve taken care of your website, it’s time to turn your attention to your overall business structure.

    Hong Kong payment processing

     

    Re-structure your business

    What many Asian merchants fail to realize when they initially apply for international payment processing capabilities is that it’s physically impossible to gain a merchant account without a business presence or bank account in the region you are applying for. We’re not just talking a virtual office shared with thousands of other businesses. A real office with a real physical location is a huge advantage. Not only do you need a business presence in the region of application, in most instances you also need salaried staff. You also need at least one director who is a permanent resident or native to that country.

    It seems like a large expense for a small to medium-sized business, but it does come with its advantages.

    For instance, if an online store based in Hong Kong sets up a subsidiary office (and a bank account) with an EU native in Cyprus, they would then have to ability to process payments for the remaining 30 countries that make up the Europe Economic Area (EEA) with just one merchant account. Also, transaction costs will be lower and sales conversions will skyrocket. There are several companies that offer done-for-you packages to help you incorporate and become compliant with European regulations. Also, there are several tax friendly jurisdictions which can benefit your business.

    Some payment service providers promise big benefits. But, they neglect to adhere to strict requirements in these regions. Well, be aware that you may have committed to an illegal provider who may start to siphon funds from your payments after a few months of processing. Experimenting with these types of service providers is not worth the risk.

     

    It pays to get an offshore merchant account

    Getting a merchant account in the right manner can prove very beneficial. Both credit and debit cards transaction approval rates will soar, because the issuing bank’s anti-fraud software will recognize the merchant account provider. These trusted banking relationships allow you to build up reserves in foreign dollars. You can also offer products to customers in multiple currencies within just one jurisdiction (such as Europe).

    You can also use more liberal countries such as Canada or Panama as a stepping-stone to build up enough processing history with a recognized merchant account provider. This option will allow you to win over similar providers in tougher jurisdictions to crack, like the US.

    However, Asian merchants need to remember an acquiring bank’s vetting process has many requirements. Prepare copies of invoices, licenses and agreements from suppliers and fulfillment warehouses in order to pass the KYC checks.

    Additionally, compliance needs special attention for Asian merchants.

     

    Be compliant to gain better Asian payment processing

    As an Asian merchant, you need to satisfy credit card networks as well as banks when it comes to compliance.

    Your website’s checkout must adhere to the highest possible levels of security (including SSL encryption). By adhering to the internationally accepted PCI DSS compliance requirements, you ease the pressure on your company to meet both card and payment solutions provider’s standards.

    Once you’ve secured the checkout, it’s time to review where and how you are storing your customers’ intimate credit card data, if at all. It’s crucial to use a well-known PCI-compliant third party provider to store those sensitive details for a couple of reasons.

    First and foremost, without doing so you will likely fail to meet the requirements of a merchant account provider. But secondly – and perhaps more importantly – you will protect your business from liability in the event of your online store is subjected to a cyber-attack carried out by hackers looking to gain the credit card information of your customers.

     

    Offshore credit card processing can transform your Asian business

    Online stores based in Hong Kong or Singapore have long-suffered the consequences for being unable to secure better payment processing for their US and European customers.

    This doesn’t have to be the case. By investing in well translated English websites that meet all of the necessary compliance requirements, Asian merchants are less likely to suffer the same fate as some other high-risk operators within the continent.

    Furthermore, merchants need to expand their physical presence before they can do the same for their virtual entities. Real businesses with local directors and bank accounts get approved for offshore merchant accounts a lot faster! In some cases, it only takes one subsidiary to secure the payment processing for dozens of other countries.

    Thus, it always pays to make the investment in more physical locations. Simple corporate structures facilitated with the help of online incorporation agents is one place to start. They are experts, and can help you find a suitable director and staff members for your company. Local employees can assist with supporting your customers in the region.

    We are experts at helping merchants secure international payment processing. By having an online store (be it consumer electronics, luxury goods, etc.) and business set up you are off to a great start.

    If you need help improving your Asian payment processing capacity, contact us today. We can find you a solution that will grow your company internationally.

  • Hair Restoration Merchant? Don’t Lose Your Hair Over Payment Processing Difficulties!

    Hair Restoration Merchant? Don’t Lose Your Hair Over Payment Processing Difficulties!

    Hair restoration merchants have experienced awesome revenue growth over the past decade. In fact, last year the global size of the hair removal and restoration market had an $8.4 billion value. That figure is projected to rise to $12.1 billion by 2026.

    The popularity of products for balding consumers is why demand for credit card processing capabilities has soared.

    You may have already thought about getting secondary merchant account for your hair restoration offer. If not, you will be the end of this blog post.

    If you’re a merchant, you already know why hair restoration is so big. It’s in part due to the increasing number of males (and a small percentage of women) looking to slow down or prevent the process of going bald.

    In the US alone, over 50 million males experiencing some form of hair loss. Also, 30 million American women suffer from similar hair-related conditions (such as alopecia and genetically pre-disposed hair loss).

    Both males and females look to a range of solutions to beat hair loss. Thus hair restoration merchants should be aware of which verticals their products fall under when trying to get approved for a merchant account.

    More importantly, some merchants think their current payment provider is supporting their business, but have no clue they could be doing far better.

     

    Hair restoration products can fall under different business categories

    Underwriters at acquiring banks and other payment providers make decisions based on several factors. Those considerations can include business models and product types.

    For instance, if you sell hair growth supplements with Biotin or topical hair rejuvenation creams, you are classified as a nutraceuticals vendor. Merchants in this niche are often considered high risk due to high chargeback rates. In your business you know the pills don’t work for everyone the same way. Therefore, it’s a good idea to get expert help to secure a hair supplements merchant account if this market sub-sector is your focus.

    Other merchants opt for selling physical retail items (such as laser caps). Yet despite being a retail product, hair restoration payment processing providers still perceive their associated high price points as high risk.

    Thus, really understanding how the rest payment providers perceive your product will help assess what payment processing options are available to you.

    If you want an advocate to help you get payment processing for your hair restoration offer online, email us now.

     

    Similar verticals carry over negative connotations to hair loss industry

    Hair loss products have common audiences to those of industries and products that have bad reputations with payment services providers. This is particularly the case for males in the hair loss and hair removal market segments.

    Cures for baldness often attract a similar clientele to those interested in male enhancement products. These products are often sold as upsells to an initial offer. Unfortunately, they carry over negative reputations for fraud and chargebacks. In turn, it tars these verticals with the same brush.

    Likewise, many merchants in this area look to stack volumes of supplement bottles or sell subscriptions. Providing better value to customers while increasing profit margins.

    Selling in multiples is great. But subscriptions are much trickier, especially since discounted or free trials are frowned upon. After using a hair restoration product short-term (e.g. six months), customers often want refunds if they don’t like the results. If your offer has a subscription element, that’s likely the reason for a declined merchant account. Free trials to those subscription plans only serve to worsen the problem.

    As a merchant within this industry, it’s crucial to take extensive anti-fraud measures. Lower chargeback ratios help you stand out from industry rivals. You’ll increase your chances of a successful application for a merchant account.

    But what else can hair restoration merchants do to appeal to payment processors?

     

    A Step-by-Step Checklist to Better Hair Restoration Payment Processing

    There are a few measures hair removal and hair restoration merchants should take to boost their chances of getting a merchant account. They are as follows:

    • 3-6 months of processing history – Sometimes merchant account providers reject applications without processing history. Establishing proof of sales offers enough evidence to assess your previous performance. Starting with a small volume merchant account may be the best way to go. (Like only processing 25K per month.) This will help establish trust and allow you to apply for another account that can accommodate higher volume after a few months.
    • Relevant licenses and certificates – Hair restoration merchants are able to distinguish themselves to payment processors. This can be achieved by supplying documentation such as GMP (Good Manufacturing Practice) certificates and authenticity documentation from suppliers. Acquiring banks use these documents to decide whether or not you are a genuine outfit.
    • Company paper trail – Invoices, purchase orders, bank statements, and agreements with suppliers and fulfilment companies will all help to prove you’re a genuine merchant with honest intentions. Without such documentation, merchant account providers will find it difficult to assess the longevity of a business.
    • Identification Documents – Merchants will not be able to gain access to a merchant account without first proving they are who they say they are. Therefore, make sure to have multiple forms of government ID ready to present upon request.

    Don’t lose hair restoration payment processing capabilities

    Despite the fact that hair restoration merchants are succeeding, approval for payment processing isn’t keeping pace for several reasons.

    High-risk product classifications (supplement offers) affects how banks see your business. Merchants sell products from similar categories that carry a bad reputation such as erectile disfunction pills or creams. Many vendors also have difficulty in providing correct documentation can all prove tough stumbling blocks to overcome.

    However, it is very possible to get a merchant account for credit card orders of hair supplements and similar products with the right steps.

     

    DirectPayNet is not your average payment service provider

    DirectPayNet’s goal isn’t to just get you credit card processing and abandon you once online orders come in.

    Our team invests in your business long-term so it won’t collapse if fraud, chargebacks or industry compliance comes knocking.

    We have devoted over 10 years of experience in payments to high-risk businesses.

    If you want a lasting payment solution for your hair restoration or similar offer, contact us today.

  • How Easy Is It To Get A Precious Metals Merchant Account?

    How Easy Is It To Get A Precious Metals Merchant Account?

    Are you trying to find a merchant account for precious metals? You’re not alone in your pursuit. Recently, we’ve had a lot of  merchant account inquiries from precious metals, bullion, commodities and forex trading merchants. We can understand why.

    There’s been recent talk about an impending recession in North America. Consequently, we face the prospect of the US dollar losing value. As a result, more investors are looking to precious metals for security reasons. Thus, the demand for high-risk merchant accounts so vendors can answer the needs of customers. Investors large and small are looking to gold, silver, bullion and precious stones as more viable investments in the event of a downturn in the economy.

    If you sell bullion or any other form of precious metals and are trying to diversify your payment capabilities, this post is for you. We’ll be touching on the various options and trends for merchants in this industry. More importantly, we will teach you what it takes to get approved for payment processing.

     

    If you have a precious metals merchant account, keep it

    Operating in a high-risk industry has many challenges, especially the ability to accept credit card payments. Therefore, a merchant account is a useful tool to automate this process. This is especially true for receiving, verifying, and transferring credit card payments.

    If you already have a merchant account do everything you can to keep it! Unfortunately, accepting credit card payments come with issues of high chargebacks and fraud. Risk like this can lead to merchant account suspension or fees for high fraud-to-sale ratios. (You can learn about these issues with Visa in this post as an example.)

    Chargebacks and fraudulent activity are the biggest reasons for account shut down. Often signs of high risk occur one month and go ignored, because merchants don’t understand the steps to remedy the problems. When risk get worse for consecutive months, merchants end up in bigger trouble.

    When you operate as a commodities dealer, it’s classified as a high-risk business mainly due to high ticket sizes. In addition to fraud from customers, some dealers attempt to defraud the public. So, the requirements for merchant account approval often seem insurmountable. But, they aren’t and we can show you why.

     

    It’s not just about domestic merchant accounts

    Precious metals dealers operate in other jurisdictions outside of the American market. If you aren’t branching out to other countries, then you seriously should be to expand your business. An offshore merchant account makes sense if you want more revenue beyond your domestic market. Not only will cross-border sales have a higher approval rating, but multiple currencies for trading will also be available. This is common in the EU to accommodate more investors.

    Moreover, it’s often easier to get approved for offshore merchant accounts when you operate a high-risk business model. There are a few different regulations to adhere to; however, other countries are much more liberal when it comes to accepting certain business categories. In knowing this (for example, at DirectPayNet), we help our high-risk business clients expand to Latin America and Europe to access other payment solutions.

     

    Underrated payment options for high-risk businesses

    Domestic and offshore merchant accounts aren’t the only way to boost your business capabilities for taking credit cards. Here are three overlooked payment options you should use (depending on your location). They are great paths for building processing history, which is key for the merchant account application process.
    1. ACH Payments

    ACH processing is one of two direct debit transfer options from a customer’s account. Offering this method to prospective buyers has great benefits. There is a significantly lower risk of payment and chargeback reversals. Additionally, friendly fraud isn’t a common problem when customers can pay direct to an ACH account.

    1. E-Checks

    The second direct debit payment option is accepting electronic checks (e-checks). An e-check works similarly to regular checks, except that it is digital. A scan or photo of the check must be sent to facilitate the direct debit, but this is required only once. And don’t worry about time: these can be processed more quickly than paper checks.

    1. MOTO Payment Processing

    Mail Order/Telephone Order (MOTO) relates to telephone orders via a payment gateway. Customers may call your agents over the phone to make their orders, which provides more control of the buying process. If you choose this method ensure you have a reliable system in place to prevent theft customer’s credit card details.

     

    How to improve your chances of getting a precious metals merchant account

    In addition to overcoming your label as a high-risk business, you also need to prove the legitimacy of your company. This means operating within the confines of your country’s regulations. For example, in the US, dealers must ensure they meet precious metal and bullion integrity requirements from regulatory bodies. Don’t forget to check your local state regulations as well.

    The same standards apply in Canada. According to their regulations, dealers in precious metals “must fulfill specific obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and associated Regulations …”

    There are a few others obligations that payment providers must look for when you apply for a merchant account. These may also be tied into the regulations governing your industry.

    • You must show a license or proof of registration with relevant government bodies if you deal in precious metals.
    • If you’re storing these metals, adequate evidence of secure facilities must be provided. These can include signed agreements with facilities, clear images of the inventory, up-close photos of specific merchandise, etc.

    Actioning the above items will distinguish your business from merchants who indulge in fraudulent practices.

     

    The benefits of low risk in a high-risk industry

    Low chargeback ratios and a good business reputation mean your business might show up on real review sites like Better Business Bureau (BBB.com). A nicer reputation means a higher chance of approval for a precious metals merchant account or other type of processing.
     
    It’s always good to add other choices to existing automated credit card payments. This improves your chargeback ratio and limits your risk exposure. These options also help you form good processing history to support your application. 
     
    Additionally, if you’re a new business applying for a merchant account, begin by selling low ticket products (e.g.$300 tickets instead of $1000) . Build up your processing history with a trusted provider before pushing for higher volumes (e.g.$30,000 vs. $75,000/month).
     
    So, you’ve seen how to improve your chances of merchant account approval. And we’ve given you three awesome tactics to grow processing history through a few low-risk payment methods.

     

    Now it’s up to you to take your business to a higher level!

    DirectPayNet works exclusively with medium and high-risk companies, including precious metal dealers. Therefore, if you are established and ready to increase your sales, contact us today.