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  • 4 Merchants That Benefit From ACH and eCheck Payments

    4 Merchants That Benefit From ACH and eCheck Payments

    High-risk merchants thoroughly rely on credit card processing, but they should explore offering ACH and eCheck payments too for their US customers. These payment models are a commonly overlooked option. They are low-risk and can make credit card acquiring easier down the road. This method is a great alternative for startups with no financial history. Also, if you’re MATCH-listed (Member Alert to Control High-Risk) or have a terminated merchant account, this helps keep your business open while you discover a new way to accept credit cards.

    High-risk businesses like precious metals, credit repair, nutraceutical or property management merchants are naturally excellent candidates for ACH processing. This is likely to be an afterthought if your prime focus is on getting a standard merchant account to accept credit card payments. But, based on our expertise you are missing out on a solid payment solution for willing buyers. ACH can raise your bottom line up to 10% with orders from customers that have limited access to credit.

    Why an ACH and eCheck payments solution is best

    In a previous blog post, we defined and distinguished the difference between ACH and eCheck processing. Here’s a quick recap:

    Automated Clearing House (ACH) processing and eChecks are practically the same thing, with ACH being the network and eChecks being the actual payment you receive. ACH is the network of financial transactions that allow different banks to communicate with one another. With this network, funds can move freely to and from connected bank accounts. In simple terms, ACH processing is basically like paying with a check for online purchases. All the customer does is input their bank account info safely and securely into an order form at your checkout. For eChecks, you need a visual of the actual check being used to make the purchase.

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    The beauty about ACH and eCheck payments is that you don’t need a merchant account. This is a completely independent service. The most massive benefit of using ACH processing is that it gives you more flexibility to reach a new type of customer.

    Additionally, being in the precious metal, property management, credit repair or subscription merchant category typically makes your lucrative business attractive to fraudsters. You become prone to more expensive and excessive chargeback rates or customer disputes compared to conventional online sellers. Risks of this nature costs companies time and money – neither of which you want to waste.

     

    Precious metals merchants

    Precious metals merchants should definitely consider ACH and eCheck payments. Considering the recent aftermath of the stock market market plunge last Christmas Eve, this is timely. The fall of US stocks had an impact on consumer interest and the sale of gold bars, silver coins and bullions. People panicked due to the uncertainty of their investment’s future.

    Credit card acquirers are worried about reputational risk and financial liability linked with precious metals dealers. Fraud is at the root of this. Notable incidents of exaggerated markups, the sale of fake coins and other products, plus trafficking and money laundering result in increased chargebacks. Criminal investigations and lawsuits can also be pursued.

    Many payment solution providers are hesitant to issue a merchant account due to the considerable risk involved with this specific industry. However, with the right paperwork and business credentials, legitimate companies in this market succeed when using ACH. Merchants do not need to worry about the use of stolen credit cards. Once money is withdrawn securely and successfully from a customer’s account, concerns over theft and chargeback fraud are reduced. What’s more, ACH may allow ticket sizes larger than credit cards to be processed.

     

    Credit repair experts and coaches

    Credit repair is another common merchant category considered risky for payment providers. In today’s market, these financial services have exploded given that the average American is USD $38,000 in debt up $1,000 from just a year ago. Because of this unfortunate number, many people are averse to wracking up more credit card debt.

    The economic environment, rising disposable income and low unemployment rate have also proved unfavorable for the credit repair industry. Revenue for this sector declined at an annualized rate of 5.2% over the five years up to 2018. Statistics like these deliver a negative impact on credit repair. Again, reputation and financial liability lead credit card processors to flag your business as high risk.

    Fortunately, for merchants in this category, ACH is an alternative option to process orders from potential clients once your product or service has been delivered. Whether it’s personal consulting services, an online course or live event, you can carefully establish processing history through this channel. Chargebacks and refunds are allowed up to seven days and do not incur similar consequences as with credit cards. If your ACH processing is ever shut down, finding another provider won’t be as challenging.

    In DirectPayNet’s extensive experience, non-compliance with the federal Credit Repair Organization (CROA) and high incidents of fraud are ordinary reasons for payment processing rejection. Part of our specialty is aiding merchants with compliance. It is imperative not to present customers with false claims, unclear terms and conditions, and questionable services. If you want to accept credit cards but cannot get approved, exploring ACH as a first step might bring you closer to your goal.

     

    Nutraceutical merchants that sell muscle gels, dietary supplements and weight loss teas need ACH and echeck payments

    Vitamins, supplements, skincare and other nutraceutical merchants

    Companies that sell muscle gels, dietary supplements and weight loss teas are missing out on ACH payments. Some health merchants already face pushback when applying for processing due to high chargebacks. As nutraceuticals are untested and regulated to the extent of pharmaceutical drugs, getting approved to accept credit cards for products of this nature can be challenging. Therefore, an acquiring bank may not accept your business. But if you are seeking a solution or are even MATCH-listed, you are in luck! ACH payment processing remains a wonderful alternative to a merchant account.

    If no processing history is available, then ACH is the way. It allows the ability to build credible processing history, which is a forward-thinking strategy for your business. Our team has helped merchants build up at least three months of good financials to show two things; that 1) they can scale, and 2) fraud rates can be kept low.

    Through our experience in the payments industry we understand how to navigate merchant account applications. Nutraceutical merchants sometimes are unaware that processing history isn’t enough to be boarded. Compliance is a key factor. Additionally, pricing model is important. Free trial merchants are learning it is harder to secure a reliable payment solution. A straight-sale model or a subscription without a free trial is ideal to minimize fraud and help in getting a merchant account approved.

    A fully compliant nutraceutical website includes a list of ingredients, clears terms and conditions, privacy policy and other elements. Moreover, showing valid product licenses and agreements with suppliers remains an asset to obtaining a payment solution. With our team‘s guidance we help nutraceutical merchants get a foot in the door.

     

    Gift, wine clubs and other subscription merchants

    Beauty, gift and wine clubs are excellent candidates for ACH. Declined or cancelled recurring orders are one of the biggest hurdles for subscription-based companies. It’s easy to see how these types of merchant accounts can be terminated; fraud can run rampant if preventative measures aren’t applied early.

    The ACH processing fees are affordable, and the frequency of chargebacks is lower for subscription merchants. Customers are asked more verification questions which lowers fraud. Having reduced fraud delivers a better financial outlook for your company when you are ready to find a credit card acquirer.

    Credit card rebills often have a higher rate of declined transactions. ACH offers more flexibility with recurring check orders and lowers those decline rates. If a customer changes banking details, his new account is updated, which reduces the frequency of declined orders. Completed transactions of this nature transfer the money directly from the consumer’s account within 24-48 hours. Consequently, the risk of credit card chargebacks or customer disputes is reduced. Overall, you can expect to see higher conversions on subscriptions.

     

    Property manager merchants

    Despite the explosion of services like Airbnb, vacation rental companies are unpopular among some acquiring banks. Property management merchants can face the same fate. However, an ACH and eCheck payments option is a good payment solution for business owners unable to get approval for a credit card merchant account.

    Property managers are considered high-risk due to the future fulfillment of their services. Rental payments of $1,000 and higher make merchant service providers nervous. This is due to substantial amounts of money being transacted, and the ease with which they can be reversed should a payee cancel or change their mind. Business models like this benefit highly from using ACH and eCheck payments compared to, or as a complement to Visa, MasterCard or American Express.

    Property managers can rest easy knowing that transaction fees are lower than would typically be issued by credit card companies. Besides, if a good tenant is paying a recurring $2,000 per month for a property, there are fewer chances of that transaction being decline. With ACH the frequency of rejected orders due to insufficient funds is lower than credit cards, as customers are more conscious of potential NSF charges.

     

    ACH and eCheck payments are one of the best alternatives to a merchant account

    ACH and eCheck payments are used by many high-risk merchants to help reduce risk. This practical solution also helps merchants properly establish a good financial history when applying for other US-based processing options. The ACH payment method means heightened conversions and sales increases up to 10%, as you’re attracting potential customers unwilling to use a credit or debit card. If the money is in your customer’s bank account, you get paid! It’s as simple as that.

    As we mentioned before, there are significantly lower fees, and it isn’t complicated for your prospective buyers. The transaction is digital. Therefore, there’s fewer bank trips, paper invoices and checks. It means everyone is more content.

    Contact DirectPayNet to get started, and give your customers more options like ACH and eCheck payments.

  • Online Dating Is A Scam, And Other Myths That Can Jeopardize A Dating Merchant Account

    Online Dating Is A Scam, And Other Myths That Can Jeopardize A Dating Merchant Account

    The incredible popularity of online dating sites and apps is both a blessing and a curse when applying for a dating merchant account for your dating business. On one hand superior technology has made the industry incredibly lucrative for business owners and merchant service providers alike. On the other hand, bad reputation and rampant fraud have resulted in some pushback from payment providers. The latter especially has made finding secure and reputable dating merchant accounts challenging.

    There’s no denying the online dating industry is rife with chargebacks, bots and other issues associated with high-risk business. Even with the increased popularity of dating apps like Tinder and Bumble, processing payments can come with some drawbacks. Companies may be flagged for being high-risk simply because of their significant monthly volume of subscribers or revenue.

    For the average user, these businesses are necessary for meeting someone special. But, to the owners, they are not just “any” company. If your online dating product is generating at least $10,000 in monthly revenue from your service, then this blog is for you. The time for a proper payment solution is now. Read on to learn how to manage the issues that create high risk for a dating merchant account to ensure you start scaling.

     

    Industry trends show online dating is here to stay

    A recent article, quoted Mandy Ginsberg’s thoughts on Tinder. Ginsburg is the CEO of Match Group. She said, “Tinder really was a category changer… people in their 20s really never used dating apps until Tinder.” In spite of saturation of the dating market, business models like gentlemen‘s and strip clubs are dying out. This is due to their lack of competition compared to the Internet. Younger generations want the convenience of meeting people via a scroll on their smartphones.

    These dating apps have caused a shift; therefore, they are now one of the biggest clients of the payments industry. With so many users starved for connection, a dating merchant must diversify their memberships and payments to cater to more people. There are products by race, religion, sexual orientation, profession and income levels.

    According to an article looking at current trends, 15% of people globally used dating apps in 2015. If the pattern continues, they estimate 20% of them will be willing to use these products by 2020. Additionally, the projected worth is anticipated to be $12 billion by 2020 and is seen as the next big thing by investors. This has major significance if you are in this widely successful and growth industry.

     

    Scams keep your merchant account in the “high-risk” category

    Behind the scenes some dating apps are rife with complaints, online scams, bots, and stories about catfishing and ghosting. Some even were used in frightening accounts of assault or violence occurring when meeting a perfect stranger. When this happens, customer reviews, news coverage and other types of negative media can place your merchant account in jeopardy with an acquiring bank. If your business is still in its infancy and has little to no processing history, this can result in a challenging time in obtaining a payment solution. Even if you have processing, statements with visibly high refunds and chargeback rates can turn off most payment providers.

    Statistically, according to the Small Business Association (SBA), 30% of new businesses fail during the first 24 months of being open. Another 50% fail in the first five years and 66% within the first 10 years. A new business in the online dating market may give payment providers even more reason to be concerned about accepting you as a client.

    For these reasons, and so many more, payment processors do not look upon dating merchants favorably. This is where DirectPayNet and our expertise in handling high-risk merchant accounts can ease profitability concerns long-term for business owners.

     

    High chargebacks for online dating merchants

    My merchant account receives a high number of chargebacks. What do I do?

    If you own a business where chargebacks are as high as 5%, you need different preventative measures before it’s too late. In situations like these, providers like Stripe will not tolerate this type of risk. Top-earning businesses accept credit cards through merchant accounts, but must meet some conditions of their acquiring bank. This includes finding ways to lower their risk.

    There are several ways to reduce fraud, but it’s a multi-pronged long-term process. For example, most merchants use affiliate marketing, but never examine partners with low conversions. Some businesses don’t limit memberships from specific regions. Some do not verify active members often enough to know if they are bots or real people.

    Finally, we often discuss the benefits of ACH payments for desktop users. Some merchants can be lazy to allocate IT and marketing resources to include this payment method. And yet, e-check/ACH have proven to lower chargeback rates significantly.

    Cryptocurrency (while not as popular as credit cards) is being used as a secure payment method. Many high-end dating apps that require users to earn certain income levels to qualify, will allow memberships to be paid in Bitcoin. While not a mainstream solution, crypto payments can add to your bottom line in a secure and chargeback-free way.

    Our goal is to find the best solutions that work specifically with high-risk merchant accounts to ensure their payment process is simplified and uncomplicated.

     

    5 ways to get approved for a dating merchant account

    Below are recommendations that have helped DirectPayNet’s dating merchants get approved to accept credit card payments. They are great strategies for preventing fraud and combating risk:

    1. Use fraud analytics tools to block potential customers from countries with high fraud. Regions of the Middle East, Africa, Asia and South America are fraught with these issues. Check your stats to determine the percentage of fraud per country. If you see outliers, it’s best to block those countries to avoid further risk.
    2. Run quarterly affiliate program audits to weed out low-converting or fraudulent affiliates. Sometime if internal resources are not available to do this, it can help to outsource this to professionals. DirectPayNet is an expert at handling affiliate audits.
    3. Add authenticating measures like 3-Domain Secure Authentication second generation (3DS2) at the checkout page. What this does for customers of your product is it sends an SMS to their mobile number registered with the credit card company. As a result, no passwords are created or remembered and websites don’t redirect.
    4. Clearly display your business’ anti-fraud methods in your terms and conditions page, which should be linked directly from the checkout page and footer.
    5. Have a transparent refund policy page including number of days a return can be allowed. This is best displayed as a separate page and should be linked via the website footer.

    There are undoubtedly many merchant service providers for online dating businesses. However, few truly understand the savvy marketing and payment needs, and unique challenges accepting credit cards in this industry. DirectPayNet aims to become a long-term provider for your company. You will have an advocate more likely to negotiate merchant reserves and volume caps, and keep your fees at a minimum.

     

    Don’t take another “No” for an answer!

    Contact DirectPayNet to help you find a reliable dating merchant account and increase your membership volume today! Call us at (800) 657-8272 or email us to get started.