Category: MERCHANT ACCOUNTS

Take Off: Cut High Processing Fees As A Travel Club, Airline Ticket Vendors Or Similar Merchant

Travel clubs, airline ticket vendors and similar merchants must prevent fraud and high declines for payment processing. Travel merchants have a tough job watching for threats like weather events and airline or other personnel strikes. Obviously, the last thing needed is throttled summer growth due to exorbitant processing fees and chargebacks cutting into margins.

However, there are many factors increasing the risk to acquiring banks and processors working with travel merchants like airline ticket sellers, clubs and timeshares. And with increased risk, come increased fees. According to a Travel Payments Study by PYMNTS.com, 5.4% of global travel sales last year went directly to payment processors. The cost to merchants was over $74 billion in the process.

Furthermore, the increasing globalization of travel means that merchants are scrambling to accept new forms of payment like cryptocurrencies and e-wallets. Merchants are increasingly banking offshore to better serve global customers, adhere to regulations and protect against currency fluctuations. So, what can you do as a travel merchant to lower payment-processing fees and seize new opportunities to scale?

Why travel merchants suffer high payment processing fees

Travel clubs and operators are tagged as high-risk merchants for multiple reasons. Firstly, a vacation booking has many moving parts. A customer can issue a chargeback if their purchase isn’t quite right (e.g. incorrect flight details, poor hotel experience, etc.). Also, many customers book way in advance, so orders that are paid today and fulfilled months later carry more risk. The payment processor can be on the hook for thousands of dollars. But, the risk of high transaction value chargebacks isn’t the only thing elevating processing fees.

Merchant account providers must absorb the costs of supplying tools like built-in data protection software and multi-stage secure checkouts to prevent fraud. This is substantial considering the alarming rise in card not present (CNP) fraud. This type of deception is expected to exceed $70 billion over the course of the next five years. Only recently has it been highlighted by a Europol investigation into transactions within the European Union (EU).

The inquiry revealed that airlines lose $1.3 billion to CNP fraud annually. They concluded their investigation with a major international sting, resulting in 193 arrests. A total of 43 countries, 75 airlines and eight online travel agencies were involved in the fraud.

Why travel operators need to have offshore payment processing capabilities

Domestic travel is popular across countries as large as the US. But, increased profit margins and scalability are found in international travel. Scaling without offshore merchant accounts is impossible. Merchants might have trouble with cross-border transactions in various global regions due to local restrictions and regulations.

By securing offshore processing you can increase transaction approval rates with airlines, hotels and car rentals whilst crucially remaining in accordance with local laws and stipulations.

Here is just one example. Let‘s say a US-based tour operator organizes car rentals for customers in Barcelona. That merchant cannot maintain access to credit card processing. You don’t have to have a local payment processor in Spain specifically,. But you must be registered with at least one payment services provider within the EU to process payments from their member countries. By accessing a provider in one country that is part of the European Economic Area (EEA), you connect to the remaining 27 member countries.

Also, securing an offshore merchant account in the EEA helps build your balance in euros rather than dollars. This strategy offers protection against currency fluctuations. It allows gateways to transfer euros across borders of up to 19 countries without incurring huge fees.

Another reason to secure offshore processing is conversion rates. Protocols such as PSD2 and 3DS2 reduce conversion rates by as much as 20% in Spain. But with the help of a local payment processor, you can instruct their analysis tools to only dynamically trigger security protocols based on previous user behavior. Increasing sales dramatically whilst remaining secure.

Why travel merchants need to explore all payment processing options

With the increasing globalization of travel, it’s imperative that travel clubs, airlines and other travel merchants diversify their banking and payment options.

Whilst credit cards have long been the mainstay of online purchases, they are generally declining as a method of payment. Credit cards are still strong in countries such as the USA, but they only accounted for a quarter of all online payments last year, with that expected to fall to just 15% by 2021. Considering this information, it’s high time travel merchants broaden the scope of their processing abilities. But what other payment options are there?

1. e-Checks

e-Checks are simply electronic versions of their paper counterparts. They offer consumers another method of payment when credit cards aren’t possible (e.g. in a country where you have no credit card processing).

Though they take longer to clear (six business days), this option is likely to increase conversions. All that’s required to make payment is the bank account number, routing number (or sort code in some countries), and name on the account. e-Check is more secure than credit cards as it’s more difficult for criminals to obtain sensitive information compared to card data.

Another benefit of e-checks is you can reduce those dangerous chargeback rates. For one to be issued, a customer must physically visit their bank, swear an affidavit and submit several supporting documents. It’s a far cry from simply calling a bank.

2. ACH Processing

Whilst credit card use is declining as a payment method worldwide, direct bank transfers are holding strong. They make up 17% of transactions today, with a projected share of 16% in 2021. Automated Clearing House (ACH) processing gives travel consumers the ability to make direct transfers to your bank. The benefit is you avoid sky-high card processing fees altogether.

Despite the fact that it can take a couple of days for a payment to clear in the USA, banks operating within markets like the EU often clear payments within hours. It’s perfect for travel club, timeshare or airline ticket sites that have or want to develop presence in that region.

3. Cryptocurrency

More and more cryptocurrency or virtual currency is increasingly an accepted form of payment in many parts of the world. Popularity of these methods have risen due to Facebook introducing “stable” coin (Libra). Unlike Bitcoin, Facebook’s virtual currency wouldn’t undergo the same extreme volatility.

Leading players in the travel industry such as Booking.com are now starting to accept payments via BitPay, a cryptocurrency payments processor. Interestingly, BitPay reports that travel industry payments rose by 13% on its platform last year, and the average value of those payments rose by 21%.

But cryptocurrency provides the most opportunity for non-traditional customers to make payments. There are an estimated 1.7 billion of unbanked individuals around the globe. They are all excluded from booking travel, because they have no payment method available to do so.

Therefore, if you manage to develop this payment functionality within your business ahead of competitors, you have the chance to gain a competitive advantage by working with previously unreachable customers who want to travel. Keep in mind, your customers must be able to present their travel documents and correct ID when fulfilling their travel tickets.

Why hiring outside payment experts saves you time

Scaling your business is difficult enough without having to simultaneously juggle several different payment processors, offshore accounts, and new payment functionalities.

That’s why it makes sense to work with an external payments expert who already has experience within the industry. Having an external team who understand the intricate details behind travel payment processing (such as airline acquiring, travel clubs, and timeshares), makes your expansion into new territories much simpler.

Consider deferring and combining all payment-related tasks to one trusted provider. You can save the costs of handling multiple payment processors and US, EU or Canadian domestic or offshore merchant accounts.

You can collaborate to develop different payment strategies that reflect the prevailing consumer demand of the specific region you’re targeting. For example, focus on credit and debit card processing in Europe where the technology functions at its best. Meanwhile, concentrate on ACH or credit cards in the US where these methods are the most prevalent payment modes.

Scale your travel business today with tailored payment solutions

The travel industry continues to grow, but high payment processing fees and the lack of offshore processing presents challenges. This is especially true for companies contemplating international expansion. There are many hurdles like local regulation and legislation. Moreover, consumer attitudes toward using tried and trusted payment methods like credit cards are rapidly changing.

Opinionated shifts present opportunities for many travel businesses to gain an edge over competitors by offering multiple payment types. Additionally, merchants can benefit from providing payment options used more prevalently in a customer’s native country. That’s why it makes sense to delegate the management of offshore payment processing to experts who have existing relationships with international payment providers.

Increase the number of bookings for your travel club, timeshare or airline ticket business! Beat competitors in your industry to international expansion, and then make sure to contact our team today!

August 1, 2019
Going From ClickBank To Your Own Info Product Merchant Account

Info products are high risk and big business; therefore, securing an info product merchant account is a necessity!

Just do a search on Google for any problem and you will find a wealth of fee-based offers to solve it. This could be an e-book on raising credit scores, an online marketing course about Facebook ad hacks, tips and tricks on how to attract the same or opposite sex, or any other digital product or service that involves prospective buyers paying for a content-based product.

There are two big challenges with selling an info product. The first challenge is managing chargebacks and risk as digital products tend to fare higher in chargebacks. The second obstacle is landing and maintaining reliable payment processing. We will share some key fraud prevention strategies from some of the biggest industry players. You will also learn how to position your products and your business to get approved to accept credit card processing.

The info products market is saturated, but still ripe for profit

Info products (also known as digital content products) are now part of a very saturated market. Nearly anyone these days can rightly or wrongly classify themselves as an expert online. Consequently, it can be difficult to stand out in a sea of mostly mediocre online marketers. The advent of social media has made this even more possible. Many merchants flock to platforms like ClickBank as a one-stop shop to launch their info product.

One of the key factors all of our top info product merchants have in common is that they have credibility. Some have done this by building an audience, partnering with influencers, and targeting audiences via social media. Many start out as copywriters, bloggers, vloggers and affiliates. They develop a loyal audience and remain consistent by producing or writing a lot of digital content.

Consistency matters greatly in the online world. That means running an email campaign, posting a blog tutorial or putting out a video weekly, monthly or however often.

Position your info product the right way to get through the door

Newbie info product merchants sometimes show their inexperience in how they sell. For example, it helps to lessen the use of language like free trial to sell a digital product or service. Free trial is not always an attractive term to merchant account providers.

Some merchants advertise a free sign up. However, behind the scenes they may turn around and charge a small usage fee during a trial or after it is done. Trust us; removing misleading claims like this increases your chances of getting approved to process credit cards. You can also try to email your customers to get consent to charge them a subscription fee after their trial is over; this buys a lot of good faith from your customers and will likely increase your odds at getting approved for a merchant account.

If you need to charge a nominal fee to verify a user’s credit card, then change the language of your offer. For example you could say “Pay $1.99 for a 5-day trial!” This is much better than leading customers to believe they’re getting something for free, when they are not. Furthermore, payment providers see this kind of false claim as a red flag for future fraud and chargebacks.

The above scenarios are just a few examples, but the moral of the story is to keep it super simple. If your product makes sense to your prospective buyers, they will be less likely to request a refund or a chargeback in the future.

Prevent fraud and chargebacks before they start

Top info product merchants use multiple marketing methods to promote their offers. Many rely on affiliate traffic, which tends to be higher in refunds and chargebacks instead of merchant-driven traffic. Hence the reason they get serious about preventing fraud through third-party analytics, authentication tools and external chargeback management services like Ethoca and Verifi. In order to keep chargeback rates at an acceptable level you must be vigilant especially when there is no physical product.

Affiliates can send very valuable traffic, especially when you are trying to build an audience. Regular affiliate program audits are must. It’s also important to decide if the return on investment (ROI) of an affiliate partnership is really worth keeping them in the program. Look at the conversion rates of your affiliates to decide if it’s worth it despite the chargebacks and refunds coming from their traffic.

Also, consider the efficiency of your customer service, because it plays a major role in how your customers respond. Can your agents appease customers that want refunds? Do your customers receive the right information that won’t convince them to call their bank and change their mind about an order? Good customer service can make the difference between keeping and losing a sale. Your customers should be able to get in touch with you multiple ways such as email, phone, online and via chat if possible.

The power of consent

Consent is a powerful thing, and it is especially key for compliance in the digital products world. Many info product merchants usually sell an item for a one-time flat fee or convince their customer to subscribe to an offer. Both are great revenue streams, with the latter being good for ongoing income. Regardless of your billing method, you could be forgetting one crucial thing: a checkbox.

For this reason, always place a checkbox on your order page above your buy button. Merchants are required to get a customer to agree to the purchase, as well as the terms of that sale. It is important to include pricing details, so the customer understands what he is agreeing to. Additionally, payment providers do not like checkboxes that are pre-checked. This is considered a violation of credit card company regulations. So, you must have your client’s click the checkbox themselves which means they consent to the purchase. It not only is a good compliance practice, but down the road you will be less liable when it comes to chargeback disputes.

Startup info product merchants should explore ACH

Beginner info product merchants make some very big mistakes when they start selling their offer online. They sign up to Paypal, Stripe, ClickBank and other alternative payment providers to accept credit card orders, but then they don’t have a plan when their business starts scaling to levels over $20,000+ every month. The thought never occurs to them that they may one day get suspended and have no backups. Consequently, after a few chargebacks are incurred the merchant must cease operating, because they were either suspended, or worse, put on MATCH if chargebacks become excessive.

Providers such as Stripe and ClickBank may suspend your account until they investigate if your volume grows too quickly as they may be afraid of your chargeback liability. The reason for this is that they have one master merchant account for all merchants who sign up with them and they must manage the risk for their collective account. If you get your own merchant account, you have more control over what happens.

Any entrepreneur selling a digital product is high risk. Therefore, getting a merchant account without processing history will be a challenge. One way to overcome this obstacle is to implement ACH or e-check processing for 60 days.

ACH processing is growing

According to Digital Transactions magazine, ACH “went on a tear in the quarter ended June 30, notching its highest growth rate since 2008 thanks to double-digit growth for key categories like Internet payments and business-to-business transfers.”

Most merchants aren’t aware that the shopping carts (like Limelight CRM for example) have a built-in ACH option. Once you have evidence of sales activity and processing statements with low chargeback rates, then you can attempt to get credit card processing. ACH also allows for seamless recurring orders. Adding ACH alongside a credit card option on your order page, can lower payment costs as well as add up to 7% monthly revenue from customers who don’t have credit available.

Additionally, if you are a start-up e-commerce business that is applying for a merchant account, you shouldn’t be asking for a $50,000 monthly sales volume cap even if you are generating that amount each month. Ask for a lower sales volume. Doing so will get your foot in the door to be approved for credit card orders. After 60 days of successful processing, most banks will allow you to scale as they will be more comfortable with your business and risk profile.

Next steps for your info product merchant account

Consider pursuing a high-risk merchant account or ACH processing solution for your existing or new info product. There are a lot of merchant service providers out there, but few have experience navigating credit card compliance regulations, high chargebacks or strategies for managing volatile volume that comes with being a successful business.

If you need help today getting approved for an info product merchant account, contact DirectPayNet. We can assist with fraud prevention, compliance rules and other factors that influence your payments.

July 25, 2019
High-Ticket Merchant Account – Get Approved To Sell Items Over $1000
Over the years, we’ve seen high-risk companies get declined repeatedly for a merchant account, because they sell expensive items. Alternatively, approved business owners are given ridiculously low monthly credit card processing volumes. Selling high-ticket products can cause you to reach that limit fast. This limitation leaves cash in your consumers’ pockets when you can’t accept any more credit card payments for the month.

The main reason for these low approvals from acquiring banks stem from three core areas. The first is that the client’s industry has a reputation for high chargebacks (like travel or biz-op). The second issue is the steep price point of goods and services. And, the third challenge is when companies have little to no processing history. However, this does not have to be your reality.

We will demonstrate how to ultimately get approved for the type of high-ticket merchant account you need. Plus, we’ll take a look at improving order fulfillment and landing more payment processing channels to expand your business.

But first …

What is a high-ticket merchant account?

A high-ticket good or service is a higher-than-normal dollar amount you expect to charge for a single transaction. For example, low-risk merchants will charge $20, $50 or $150 per product. High-risk merchants will charge $300, $500, $1000 and even as high $10,000.

What is your highest ticket amount? This is a question asked on merchant account applications, as the service provider will set this figure as your highest allowable charge for one sale. The higher your single transaction limit, the more documentation you’ll need to provide. For instance, explaining what that product is and if there are any special terms, like whether a deposit is required. Also, your potential provider may question the financial stability of your company to handle these types of charges and the repercussions that could come with them.

Travel, educational conferences, and luxury goods and services are classified as high risk. When ticket sizes reach over $1000 in certain business categories, obtaining a merchant account seems impossible. Acquiring banks may differ at what price your product or service may be considered a high-ticket item, but anything at $1,000 and over is generally within this range.

So, how does it work?

Selling high-priced goods and services typically requires a high-ticket merchant account. This can be both business to consumer (B2C) or business to business (B2B). You’re considered a more reduced risk if your sales are primarily in a B2B setting, because of the limited potential for chargebacks and frauds.

However, in the B2C sector, the likely possibility for chargebacks and fraud are greater for big ticket items. Therefore, merchants in this category (e.g. vendors of designer shoes or travel services) are high risk.

The higher the ticket price, the higher the financial risk. That’s because one fraudulent $1,000 transaction for you could be 50 fraudulent transactions for a low-risk merchant selling $20 items. Therefore, your business carries a higher risk for the merchant account provider who will be liable for the transaction should you be unable to reimburse a chargeback.

Some examples of products and services that can fall in the high-risk category include:
- Sellers of high-end sneakers or shoes
- Top designer clothing brands and outlets
- Jewelry sellers
- Travel tours, booking sites and clubs
- Customized goods retailers
- Ticket vendors (e.g., corporate events and educational conferences)
- Premium beauty, health, and fitness products
- Other luxury goods
3 Reasons high-ticket products are considered high-risk

There are three key reasons why your business in any of the categories mentioned above will be deemed as high risk. These are high chargeback rates, the potential for fraud, and order fulfillment issues.

Chargebacks

The higher the ticket price, the greater the chargeback risk. As such, contingent liabilities for a chargeback on a $1,000 product will be significantly higher than a $50 payment especially when there is a dispute.

Fraud

High-ticket items are often “friendly fraud” targets. This occurs when a customer contacts their bank to dispute a legitimate purchase by claiming a myriad of different excuses. Reasons can range from damage during shipment or not as ordered. What is often the case in these instances, is that the consumers’ bank will side with their customer and initiate chargeback proceedings. Alternatively, it’s simply buyer’s remorse, and they want to reverse the purchase.

Other fraudulent activity that tends to target high-ticket e-commerce sites include cybercriminals using stolen credit cards. Fraudsters using this technique tend to focus on companies that sell luxury goods like high-end sneakers or electronics. They order items which are then shipped and delivered before the cardholder realizes the problem and moves to contact his or her bank to request a cancelation. Merchants are left out of pocket for the merchandise and sale amount.

Order fulfillment

If your business model means that you could have a potential problem in fulfilling orders, then this places you in a high-risk category. For example, let’s say you’re selling custom luxury carpets. You get 10 orders in one week for the same style in the amount of $3500. But, your buyers have learned that the same carpets have suddenly gone out of stock and are on back order. Therefore, they’ll have to wait an extra week for it to be delivered. Seven of those ten customers will not want to wait for the product, so they’ll ask for a refund.

Because of the ticket price of the item, they may be keen to get that money back. Some impatient customers may contact their local bank to issue a chargeback. Suddenly a gross sale of $35,000 may be instantly reduced to $10,500, because $24,500 is refunded (maybe more due to double refunds). Consequently, you’ve lost more money, because of transaction and chargeback fees, and other expenses. This is a high financial risk!

So, order fulfillment capability is a high priority area for high-ticket merchant accounts. Communicating with your customers if delays occur is of utmost importance.

The Importance of web and industry compliance

Another factor that will influence your approval for a high-ticket merchant account is your website and industry compliance.

Are you using appropriate security measures to safeguard your customers’ data and protect transactions via your website? Are your service providers (like your shopping cart, checkout page software and CRM systems) PCI compliant? Have you considered adding 3D secure on your checkout page? This can help mitigate fraud by adding 2-factor authentication on your orders. Read more about 3D secure.

You also need to investigate the certification and licensing requirements for your industry. For example, certification is especially important in luxury and high-ticket items where you need to prove the source of the items. If you’re selling designer sneakers, you must possess a certificate of authenticity for your product. Otherwise, banks won’t have any way of knowing whether your sneakers are real or fake.

Merchant account providers assess other business areas. This includes product delivery methods, the condition of your inventory and your overall order fulfillment processes.
Therefore, be knowledgeable about your industries’ requirements so you can be compliant with all regulations and requirements.

Instantly improve your chances of being approved for a high-ticket merchant account

You can’t change the industry in which you operate; therefore, a high-risk merchant account will be standard for your business. If your company products are high-end, then it’s wise to apply measures to help make your case for your merchant account approval. The following are a few strategies available when you operate a big-ticket business.
- Start with low-risk payment processing
  - You can adopt low-risk practices like using ACH processing. This will reduce the risk of fraud and high chargebacks, which can result in MATCH-listing. Moreover, it will produce strong processing history for when you apply for your next merchant account.
- Take deposits for high-priced items
  - Ask for a 10-50% deposit if omitting products priced at $1000 or more via your online store is not possible. Consider taking a partial deposit on your high-ticket items and allow the balance to be provided on delivery. This tactic will limit order fulfillment issues and chargebacks. This is especially useful when you provide custom designed products. If you opt for this route, then signature-on-delivery is a must.
- Do not offer free trials
  - Have you ever forgotten to cancel a free trial? If you never wanted the product you will then decide to ask for a refund. This scenario has played out for many merchants who require a credit card or other payment method to sign up for a free trial. This method is also quite popular for sellers of monthly subscriptions for luxury jewelry. It’s best to remove free trials from your website to limit the risk of chargebacks from this process.
- Start with lower-priced products and services
  - Some acquiring banks use $1,000 as the maximum for high-ticket items. You could consider pricing your items just below this marker. Then, when you have at least six months of processing under your belt to prove financial stability, you can start offering products at $1,000 and over.
- Have a track record of service or product delivery
  - As we’ve shown, when a high-ticket merchant applies for a merchant account, one of the areas looked at is order fulfillment. So, you should be able to demonstrate strong management of the shipping and delivery process and a good history of completing orders. This is also a good method if you already have a merchant account but need to apply for a higher monthly volume cap.
Let us help you secure a high-ticket merchant account

High-ticket merchants constantly face potential fraud, low transaction approval rates and poor order fulfillment. Therefore, you need a payment solution with robust features to prevent fraud and high chargeback rates.

Amateur merchants often sign with the first service provider that gives them the ability to process credit card orders. Instead of doing that, let’s talk!

DirectPayNet specializes in helping medium to large-sized high-risk merchants land the right payment solutions. For high-risk Europe and US-based businesses who are in good financial standing, let us help you find the right payment solutions partner.
July 16, 2019
Thank Us Later – Your Own Merchant Account Vs. Being An Amazon Seller
In the past 12 months, DirectPayNet has noticed more and more Amazon sellers are opting for a merchant account. The benefits are significant as vendors want independent websites, control over product pricing, bigger profits and an easier time trading in high-risk industries restricted by Amazon. Unfortunately, those that are engaged in high-risk categories (e.g. electronics, dietary supplements, products with sexual themes) can face account bans, restrictions and blocks detrimental to their business.

Today we will provide guidance on how to go from restricted Amazon seller to independent e-commerce merchant. We will offer ways to properly prepare your company for merchant account approval. Additionally, our tips will help you scale your business to the next level with fewer limitations, regardless of how “risky” it might be.

Why is Amazon So Popular?

What’s behind Amazon’s popularity? There’s an easy answer. In 2017, over 1.66 billion people made purchases on Amazon, accounting for $2.3 trillion in spending. The platform is responsible for 80% of the e-retail market growth we are witnessing in the world right now, solidifying it as the number one place for online purchases and sales.

For sellers, Amazon definitely comes with its benefits, including:
- The biggest potential for buyer exposure worldwide
- Fulfillment services (Amazon FBA) that can reduce overhead and can cover all elements of product placing, shipment, etc.
- Product ideas that sellers can adopt without having to invent their own product
However, it’s not always a rosy picture for the Amazon sellers trying to make it in the ever-growing and fiercely competitive field.

Releasing Account Control

To reap the benefits we described above, Amazon essentially requires sellers to give up control over their online shop. It’s a different scenario compared to a personally owned website and secure shopping cart through which you can powerfully influence your eager buyers. As many sources have found, Amazon works as a “Big Brother” that can force sellers to:
- Sell products at a lower price point;
- Compete with other sellers, as well as Amazon itself, making the competition impossible all through the same platform; and
- Shut down their accounts due to an issue that might not have ever been their fault or a misunderstanding.
The above factors are why it’s so important to transition to your own merchant account once you have gained some traction on Amazon. With more control over products and the checkout page, you can tailor your offerings. For example, you can customize things like bonuses to accompany a purchase or a coupon code. Additionally, with a merchant account, you can regain autonomy over transactions and refunds as well as your customer data.

Here are a few reasons why a merchant account is more advantageous for Amazon sellers, especially those who are selling products from a restricted category.
1. 1. More Money in Your Pocket: Amazon takes a cut from every sale that happens on its platform. Although you will pay for merchant processing fees when you have a merchant account, you can control the price of products through your own website. You can retain more revenue if you control the products, pricing and the checkout process. Also, the merchant account fees are only a small piece of what Amazon is keeping of your hard earned profits.
  2. Business Autonomy: If Amazon freezes your accounts, you run the risk of being locked out of earnings. With a high-risk merchant account as a secondary payment channel, you aren’t as likely to be suspended. An acquiring bank, already familiar with your business model and its risk levels, issues your account.
  3. Tailored Business Offerings: Buyers love discounts and coupons that might make them come back for more. Although Amazon does not permit this kind of marketing, you can do it with an independent website and process those orders through your company’s merchant account.
So how do you get started?

A Merchant Account Checklist for Amazon sellers
1. First, you will need a live working website that is fully compliant with terms and conditions, billing descriptor, and a privacy and refund policy.
2. Make sure you are selling quality products and that they have quality images, clear descriptions and pricing. Include a list of ingredients, especially if you are selling something like supplements that are consumed orally.
3. Offer a customer service number (preferably with the same country code as your prospective buyers). The most successful high-risk merchants provide customers with multiple ways to interact rather than just a blank email contact form online.
4. Ensure you have a bank account for your registered business.
5. Have processing and bank statements on hand to prove your business is trading and has some capital.
It’s hard to ignore the hold Amazon has on the world of e-commerce today. However, like many merchants we’ve serviced this past year, you likely want to grow beyond the platform and generate more revenue online. You can have your cake, and eat it too, with a high-risk merchant account that puts e-commerce autonomy back into your hands.

Are you a restricted Amazon seller or are just ready to have to your own merchant account?

Contact DirectPayNet to get a merchant account today!
July 5, 2019
The Fine Line Between Nutraceutical & Cosmeceutical Merchant Accounts

The demand for cosmeceutical merchant accounts is booming thanks to a growing appetite for anti aging and body enhancement products. Acquiring banks (and other online payment providers) have excellent solutions for businesses in this category. However, getting and keeping those credit card processing services can be a challenge. Companies quickly learn that if they are not careful, recurring orders or free trial memberships could result in high chargebacks and transaction declines. This type of risk can make finding a payment processing company to accept you as a client quite difficult.

DirectPayNet is an expert in all things high risk, be it a payment solution for your libido pills or a lotion with small doses of hemp. Keep reading for more insight into getting and managing a payment solution for your cosmeceutical company.

Nutraceutical vs. cosmeceutical merchant accounts

Due to frequent comparisons to nutraceutical companies, owners of cosmeceutical businesses need to be vigilant. Both categories are ordinarily associated with free trials, chargebacks, false claims and customer complaints. They are also subject to high returns and credit card declines, plus negative media that affect future applications. However, the two are not quite the same.

Nutraceuticals are ingested and are usually protein shakes, weight loss bars and teas, health supplements and the like. Cosmeceutical products are topical, not oral. Products in this category are applied topically to skin, and claim to be highly effective, but are medically unproven.

Take beauty and rejuvenation products for example. According to a Reuters article, the global anti-aging market is expected to hit $331.41 billion by 2021. Anti-aging involves procedures and medication designed to stall the aging process. New technologies have birthed new treatments and products. This includes pricier lasers and microneedling to over-the-counter products. Wrinkle creams, butt and breast creams, dental products, muscle gels and hemp lotions have saturated the cosmeceutical market. This is only propelling an increased awareness of aging, which fuels the explosion of the industry.

Merchants in these markets face many issues when attempting to find a payment provider to approve them. However, they forget that there is a simple option available that can increase conversions and sales volume: ACH/e-check solutions. In a previous blog, we defined and distinguished the difference between ACH and e-check processing. Here’s a quick recap: Go to this link to read more of this blog post.

Changes that affect cosmeceutical merchant accounts

New MasterCard regulations and rules are bringing changes to companies that offer free trials or recurring orders to their customers. Free or discounted trials (also known as negative option billing) is a very popular sales method. Nevertheless, merchants selling subscriptions for their physical products must be aware of upcoming requirements for recurring billing practices.

New MasterCard rules will change the way merchants transact with customers. For example, when a product’s free or discounted trial is completed a merchant must receive a cardholder’s expressed consent before billing them for a continued subscription . This is one example of the broad variety of conditions now applicable to rebills. On April 12, 2019 these rules will take effect. To learn more about these new guidelines from MasterCard, click here.

Why banking offshore can benefit your cosmeceutical business

A common way to accept international sales is through an offshore merchant account for your body enhancement cream or hemp lotion products. It diversifies payments so you can be flexible in accepting a multitude of currencies that may be limited with your domestic processor.

By setting up credit card processing to support foreign buyers in international regions, you increase conversions and approved orders depending on the location of your secondary market.
Make sure you have a registered company in your chosen country. Europe-based business owners that want to expand to the US must have a registered company in any of the continental 50 states. At least one of the officers of the business must be American. You must also have a bank account for that registered company.

For a full list of references about offshore merchant accounts, please refer to this article here.

The cosmeceutical industry is growing

According to a recent article, topical treatments like creams and peels account for the majority of cosmeceuticals at about 30% of the market. The popularity of these products have gained momentum in European countries like the U.K., Germany and France. IBISWorld estimates revenue for this industry was $5.5 billion in 2014. Cosmeceuticals are also slated to expand at an annualized rate of 6.8% up until 2019. Therefore, this is a good time to be a cosmeceutical merchant.

Baby boomers are responsible for the increasing size of the market. Women are the primary consumers of wrinkle-reducing moisturizers and other anti-aging topical treatments. Older women tend to have higher disposable income than their younger counterparts, enabling them to use expensive cosmeceuticals daily.

Making your cosmeceutical merchant account web compliant

Cosmeceutical businesses must have a track record of stable financial statements showing few chargebacks and credit card declines, and a high transaction approval rate. These are best practices for maintaining a merchant account. In addition, ensuring you are web compliant (such as posting a list on your website of product ingredients) is a benefit to your company’s reputation.

DirectPayNet has a wealth of experience helping merchants find payment processing solutions in Europe, North America and South America. This includes those that need to support recurring orders for customers that want to subscribe to products on a monthly basis. Contact DirectPayNet to accept credit card and ACH payments for all of your cosmeceutical products.

April 4, 2019