DirectPayNet

Category: MERCHANT ACCOUNTS

  • Facebook Ad Compliance Could Endanger Your Credit Card Processing. Here’s How. (Pt. 1)

    Facebook Ad Compliance Could Endanger Your Credit Card Processing. Here’s How. (Pt. 1)

    Scandals. Congressional Hearings. Regulatory Changes. It’s been a big – and costly – year for Facebook in the US and EU. Facebook was fined £500,000 by the EU’s Information Commissioner’s Office. The company is also required to pay a $5 billion fine to the FTC for its role in the Cambridge Analytica scandal.

    If you rely on Facebook Advertising, it would have been a big year for you too.

    Algorithm changes are impacting marketers. You’ve had to keep up with the many changes in Facebook’s Advertising Policies in its new thrust at improving privacy. Even more important is managing a delicate balance in your marketing. How you wish to advertise your product or service versus complying with Facebooks’s ad rules is a tricky minefield of disapproved ads. It’s even more difficult when you operate in a high-risk merchant category such as supplements, weight loss offers and business opportunities.

    Plus, you probably don’t even realize how many common factors Facebook compliance has with your merchant providers requirements’.

    So, Facebook compliance is not just about privacy and how ads are run. The real danger lies in the implications for your merchant processing. It’s about balancing the delicate line of compliance between both.

    We will attempt to help you get better at balancing Facebook ad compliance and merchant compliance.

     

    From past to present – it’s always been about ads for Facebook

    Facebook has always relied on ad revenue, even from its inception.

    In its early days, Facebook sold advertising space for flyers. It also had only a limited target audience for ads – college students. Facebook has since evolved into the most popular social media platform. To date, it has more than 2.45 billion monthly active users in the third quarter of 2019.

     

     

    With its growth, businesses large and small see Facebook advertising as a marketing must-have. Over 7 million active advertisers make use of the platform to promote their products and services.

    Indeed, Facebook consistently tries to make advertising attractive to marketers. In the past year, there have been several changes, including a 2% decrease in the average price for an ad, while ad impressions grew by 34%. This makes it a compelling arena for advertising targeting. Many popular consumer products in the supplements and biz op niche survive and thrive because of their traffic Facebook ads generate.

    The process of advertising has evolved over the years. Facebook continues to tighten its ad compliance requirements, because of increased scrutiny. For example, health and fitness high-risk merchants could once show before and after claims in their Facebook ads. Now, the platform prohibits these types of ads. 

    Facebook compliance is a delicate balance

    So, you’re working on compliance with Facebook’s many rules. You’re also navigating the intricacies of owning a merchant account as a high-risk business. There are similarities in the compliance requirements for the two. So, you may feel that in adhering to one, you adhere to both. That’s not the case. There are a few differences that you should note.

    Take for example operating in the supplements market selling health, fitness, or weight loss products and services. You could be approved for a merchant account as long as products do not contain banned substances. (Learn more about weight loss merchant accounts.) Your business would be categorized as high-risk and face the issues that come with this.

    Despite having permission to accept credit card payments for this product, you must follow Facebook’s ad policies. Ads targeting specific Facebook users aren’t allowed. Doing so will get you penalized. This can hurt your reputation, sales and future potential.

    Another example is if you operate in the adult products market. For the safety of your Facebook account and merchant processing, your offer must target users 18 and older only. But, your adult products must be free of any nudity or explicit sexual situations.

    Cryptocurrency is another popular online offer. But, it’s forbidden to promote these types of ads on Facebook. And, Facebook’s Product Management Director, Rob Leathern, contends these ads can be misleading or deceptive.

    Facebook compliance policy - Financial offers

    But, there are some similarities

    There are several similarities in the compliance requirements for Facebook advertising and merchant websites. We’ll use nutraceutical companies again as an example. If you sell health supplements to US buyers, you need to be careful of the claims you make. The FTC and FDA have strict guidelines on what you are legally allowed to say about your product. It doesn’t matter if it’s in an ad or on your website/landing page – only verifiable claims are allowed.

    That’s why financial marketing giant, Agora Financial, through one of its subsidiaries (NewMarket Health) is now in court. They are answering to charges brought by the FTC for misleading advertising about reversing Type 2 diabetes.

    Facebook compliance - false claims

    Like merchant services, Facebook has also singled out high-risk verticals like dating and subscriptions. Dating service companies must follow strict guidelines. Subscription service businesses must do the same. In fact, the compliance requirements for subscription services on Facebook are quite similar to those for merchant accounts.

    The requirements include:

    • Empty checkboxes on the landing page so users actively select the service
    • Clear presentation of prices and recurring charges
    • Free trial details must be explicit, especially about what comes after the trial

    Facebook also has more requirements for your ads’ landing pages. They should not be misleading. They should not do bait-and-switch – the ads must be directly related to the product or service you’re advertising. Much like your payment processor’s requirements for your website.

    If you’d like to know more about how high-risk businesses can improve their payment processing, talk to us as DirectPayNet. We service a wide range of high-risk companies just like yours.

     

    Credit Card companies demand more

    People have criticized Facebook for not being transparent. Yet, transparency is actually key in getting approved for merchant processing. Approved merchants have a long list of credit card network compliance requirements. This is especially as it relates to your online offer.

    Some of the must-have elements for your website include:

    • Transparent terms and conditions:
      • Your website terms and conditions must be clear and easy to understand.
    • Detailed privacy policy:
      • Clearly state how and what type of information is collected from visitors to your site.
    • Transparent pricing and payment details:
      • If pricing details would differ by jurisdiction (e.g. US vs Europe), your terms should clearly state and explain this. If there will be recurring payments, this should be explicit.
    • Refund Policy:
      • Make it easy for customers to find your refund policy and write it clearly.
    • Accessible contact information:
      • It should be easy for customers to find your contact details and get in touch with you.
    • Clear product descriptions:
      • This information should be crystal clear. It should cover areas like where and how your products are made, etc.
    • The checkout process and page:
      • Order and checkout pages should be HTTPS compliant and secured including SSL. You should display the credit card logos of the brands you carry (e.g. Visa, MasterCard). The checkout page should disclose any subscription-type payments or recurring billing. This should include the amounts and whether it’s variable.
    • Clear transaction descriptors:
      • The description that would appear on the bank statement after a purchase should be clear so customers can easily recognize the transaction.

    These are in no way the sum total of the website compliance requirements of credit card companies like MasterCard and Visa. Sometimes, there are industry-specific requirements. For example, adult merchants need an age verification pop-up. Streaming business owners must show proof of your license to distribute content.

     

    So, Facebook compliance in a nutshell

    Yes, that was a lot of information in one reading. But, at the end of the day, it’s about keeping your business compliant. Stay abreast of these sometimes-conflicting guidelines across platforms. Plus, if you were following closely, you would also have noticed that the business models with the highest compliance requirements for Facebook are also those verticals classified as high risk by payment providers.

    Failure to adhere to Facebook’s advertising policies could land you in Facebook jail. Violating merchant account terms could land your business on MATCH. Getting both of these positions reversed can be difficult, but not impossible.

    In the next part of this two-part series, learn how to future-proof your business when you rely on Facebook advertising (including managing your reputation). However, if you want to get a head start on better payment channels, contact DirectPayNet.

    We work with all types of high-risk businesses. Our clients are in the electronics, supplements, health, and business coaching industries, to name a few.

    Entrepreneurs have accessed better merchant processing and favorable terms with our help. With over a decade of experience in payment processing, we will raise the bar for your business.

    Email the DirectPayNet team today. Establish a better payment processing strategy for 2020 and beyond.

  • Social Media Management Software Owners Are Leaving Money On The Table

    Social Media Management Software Owners Are Leaving Money On The Table

    It’s a battle for supremacy between social media management software solutions.

    You know Buffer, Hootsuite and others big brands offer simple platforms to better manage many social media profiles.

    New startups are fighting for a share of the market. This is in part due to the rising power of social media in influencing business decisions.

    It also means competitive advantages, and a main one is payment collection processes.

    What do payment processing and the competitiveness of social media management tools have in common? Well, payment processing is a crucial element for the success of the big guys in the industry. To compete, selling your platform internationally is imperative.

    So, is your company competing against or learning from those like Hootsuite and Buffer? Then, you need to enhance your payment channels.

    At DirectPayNet, we stay up to date on everything that affects our clients in the social media market.

    We want to help you understand the challenges this industry faces. And, we want to ensure you have the right tools to collect payments in all your target markets. Let’s look at how you can boost your payment channels, lower your risk, and widen your user base for bigger profits.

     

    So, what does the future look like for social media management software?

    The future for social media management platforms is bright!

    The growing number of online influencers are behind this movement. Bloggers, vloggers and celebrities earn a living through apps like Instagram and Facebook. This is also tied into the consumer base who consume their output.

    Users of Twitter, Facebook and the like must engage with their audience. They need to manage their social media presence to capture attention.

    That’s where your software comes in.

    You sell tools to manage online interactions and collect data to help users enhance their content. But, influencers and creators work in a very competitive market.

    Consumers get inundated with images and videos. Social media platforms are now pushing user-generated content. For example, Facebook wants users to depend more on customer reviews. Plus, “pay to play” is a huge part of managing an online presence and getting in front of buyers.

    Likewise, recruiting influencers and content creators to use your brand is competitive. They are running a business. They need social media tools to better manage ads, posts, images, and other content, all in a timely fashion.

    So, how do you capture their attention?

     

    Increase your competitive advantage through your payment channels

    Your social media platform allows users to manage several social media channels. Similarly, your payment solution should allow you to manage various payment methods.

    One obvious option is credit card processing – using a merchant account. Whether it’s a celebrity, a small company or a corporate brand using your services, they will most certainly be using credit cards to pay for your service. Even regular consumers who prefer to manage their social media through one platform may like using their credit card to pay for a solution.

    In the merchant processing world, some merchants get desperate. They sign up to an easy platform like PayPal or Stripe. Alternatively, they may go to an obscure processor with half-rate features. The fees might be cheap, but so is the software and the customer support.

    Also, having recurring monthly billing increases your fraud and risk. It’s important to work with a payment processor who can help weather the storm when risk gets higher than usual.

     

    High-risk merchant accounts are better suited for social media management software providers

    A merchant’s risk and fraud levels may be high or stray from normal ratios. When working with brands like Stripe or PayPal this can result in closure. It is not uncommon to end up on a TMF or MATCH list if they believe you violated their terms and conditions.

    Visa rules state that if you offer a trial (whether free or discounted), you need expressed authorization from your customer. This applies to when the first rebilling cycle occurs. This may lead to customer drop offs, because they forget or can’t be reached to get consent. To prevent this, try different pricing strategies.

    Some merchants use a smart strategy to stabilize high conversions after the first month subscription. They keep the amount of the subscription the same every month. This will ensure voluntary consent from customers. And, you can to continue to charge them for their monthly subscription.

    You won’t be under pressure to make contact with customers. Yet, it’s important to provide customers with an easy path to cancellation. They may not want to use your social media platform forever.

     

    Implement anti-fraud tools and measures

    It’s important to also assess whether the technology of your payment processor gives you tools to fight fraud and stop orders that may be risky. This is an important balance as you should have the liberty to add fraud mitigation steps without jeopardizing your conversions or creating false negatives. A flexible gateway that understands the nature of your social media platform business is very important and can make a huge difference in your conversions and fraud ratios.

    If you sell higher ticket packages for enterprise level or feature rich social media platform packages, it is all the more important to work with a high-risk payment processor that can help navigate the complexities of high-priced packages. Charging over $500 per month for an enterprise level customer can be very profitable. But, pricing like this creates big risk on the payment processors’ side. Best to be prepared and get a merchant account that can handle these types of scenarios as you scale your social media management software.

    Also, offer ACH payments to US customers buying bigger corporate packages. Some companies prefer monthly debits directly from their bank account instead of using credit.

    Payment processing is not just about credit card fees. Technology and working with someone who understands your business will avoid bottlenecks and merchant account shutdowns that wreak havoc on your business. Be aware of pricing and ensure to work with someone fair who can accommodate your business and scale with you as you need. Learn more about payment processing fees here. Plus, there are many options for credit card processors for SaaS.

    So, how do you choose the right solution? We suggest working with a company that knows your market such as DirectPayNet. We help merchants in high-risk industries such as social media software services find solutions that work for recurring billing, subscriptions, and risk challenges faced by them.

     

    Ways to widen the customer base for your social media software

    Look at your payment processing options. While developing your software or once it is up and running, it is important to have a plan to go to market or add new markets. Once that is done, inform your current payment processor or look for a payment processor who can help you serve this market.

    For example, a US payment processor may not fare well accepting debit cards from European customers, that means loss of revenue for you if Europe is in your sights. Once you reach a sizable amount of revenue from a market it is important to study your conversions and transaction declines. Make sure you adapt to the way that market pays for products and services.

    Finding a payment processor that accommodates a maximum number of cards will only help you convert. For example, some US customers may prefer to sign up to a social media platform that accepts Discover as their Discover card gives them the most points. Although they have other credit cards they may decide to choose another product or service simply based on the payment options available.

    Ensure technology is seamless for all customers. Potential buyers should not see or feel friction in your checkout. Just as your social media management software is mobile friendly so too should your checkout page. It should be clear and simple for users buying on mobile.

     

    Before you expand overseas to widen your consumer base

    When entering a new market, it’s important to understand the size and growth of the opportunity. Also, if you’re expanding to new markets, ensure your software is translated to make it easier for your customers to use it. They will be more engaged and subscribe longer to your service if they find it easy to navigate and use. Prior to setting up offshore, in Europe or other locations, test out your product with your current payment solution and determine the cause for low conversions, if it is at checkout then you have a clue that new payment modes need to be added to scale in that market.

    Offer support in multiple languages if possible, to the very least, ensure your support hours match the regular hours of operation in your market. This will reduce chargebacks and ensure your customers don’t get frustrated trying to reach out to you. Block countries you cannot support or would not be able to use your social media platform with ease. A gateway with good fraud scrubs will have the tools you need to limit your risk and fraud exposure.

    At DirectPayNet, we pay attention to trends in various industries. Our team ensures our merchants are informed of new regulations that may affect their business.

    An ounce of preparation can relieve major headaches down the road. With a trusted professional on your side, navigating payments in various markets will be a breeze.

    Let’s grow your social media manager software company together. Get in touch today.

  • 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!