Category: PAYMENTS

Use PayPal, Get Fined $2500 — New Policy Is Insane

PayPal is one of the most popular payment processors out there. It’s a great way to accept payments and get money into your bank account, but now that the company has changed its user agreement, it’s no longer safe to use PayPal.

If you’re paying with PayPal and haven’t read this new policy update yet, what I’m about to say will probably shock you: if you use PayPal and something goes wrong with your transaction or customer service issue, there’s a chance they can fine you $2500 — even if they were at fault!

The new user agreement also gives them power over freezes or bans on your accounts without any real recourse for appealing their decision.

Policy updates happen often, usually going ignored. But not this time.

You’re not alone in thinking that it’s different this time. PayPal policy updates happen pretty frequently, and they usually go completely unnoticed. But the new changes are so drastic that they caught the attention of some big names in tech (no, not Elon Musk). There’re even people who say that if the new PayPal user agreement continues to change, they may stop using PayPal altogether—and millions of other people will follow suit too.

Can you blame them? We get emails about policy changes to terms and services all the time—almost daily. No one every clicks in and reads what that means. We’re willing to bet PayPal thought this would be another situation like that, but they thought wrong.

So what exactly is going on here? What does it mean for you? And more importantly: why should you care about something as seemingly trivial as a change in your online payment system’s terms and conditions?

Account holders are warned, this is big.

New PayPal Policy: they can fine you $2500 at will.

So when you use PayPal, they have the right to fine you $2500 if they feel like it. They can do this for any reason and they can do it with no reason at all. It’s a new policy, and it’s not because of anything that has happened in particular with the payment company.

It largely stems from the political atmosphere. PayPal is protecting itself. Think of all the backlash Facebook got for displaying misleading ads. You know who else gets in trouble when that happens? The payment processor behind the ad.

PayPal is saving itself by essentially saying, “if you do something we don’t like, you’ll pay for it.”

The new policy does refer to the spread of misinformation, and we do understand that concern. If a company using your service doesn’t align morally with you, then you want to distance yourself from them. That’s what PayPal is doing, just in the form of a monetary payment when they feel like.

They can also freeze or ban your PayPal account (not surprising).

While it’s true that PayPal has always had terms of service, the new policy imposes harsher penalties for violations. If you violate the new rules, your PayPal account is subject to a $2,500 fine. And if you’re banned from PayPal? You won’t be able to access your funds at all — nothing.

The idea of being unable to transfer money out of an account is absurd and terrifying; it’s also something that could happen under this new policy.

If you have any concerns about using U.S. PayPal as an alternative method of payment or transferring money between friends or family members, then we strongly recommend you explore other options before doing so.

Banning accounts isn’t new for PayPal. The company has a long history of banning users for various reasons, and it’s not uncommon to see people reporting their business accounts have been banned without warning or explanation. PayPal is making it easier for them to justify their actions. The only side benefiting from this new policy is PayPal, not you.

PayPal makes their own rules.

PayPal is a private company, so they can make up their own rules. They can change them at any time and you have no recourse to take action against them.

You cannot sue PayPal for anything that happens to your account or business with them. You are at their mercy, meaning if they decide one day that what you are doing is wrong or bad for their image, they will freeze your account and keep all of your funds without giving any explanation as to why or how it happened.

We wouldn’t be surprised to see PayPal regress to a “friends and family” service and only offer personal accounts. There’s just no way small businesses can benefit from their functionality anymore.

This affects many merchants in nutraceuticals and coaching.

To quote from their new policy: content that “promotes misinformation” and “presents a risk to user safety or wellbeing.

That’s a direct jab at supplement merchants and those selling information. PayPal already disliked merchants in these categories (and many others). They would ban those accounts after a few months of processing. But that was the only penalty: getting funds frozen and the account banned. You never had to pay them a fine.

Until now.

Imagine this: you’re weight loss shop is doing great and picking up steam, then you wake up one morning to see no sales have been made for 12 hours. Why? Because PayPal blocked your account—there’s no possible way for customers to make a purchase. Not because a chargeback came through, but because PayPal decided your store misinforms people.

How do you think this affects free speech? Why should it be part of the acceptable use policy that a merchant be censored for describing their product? Censoring at its finest.

If you use PayPal as your main payment processor, STOP NOW!

If you are a business owner, please use a different payment processor. Stop using PayPal. The fact that this company has been allowed to go unchecked for so long is insane, and we cannot sit back while they continue to hold our money hostage and fine us for their mistakes.

PayPal won’t support your business, they won’t protect you, and they’ll continue to take your money until your bank account is drained. This new policy is just a stepping stone—expect more to come.

There’s no such thing as seller protection to PayPal, just another way take even from the e-commerce merchants that are dedicated to them.

Instead, you need a real merchant account with real card payment processing power from a provider that effectively supports your business. Not Stripe, not Venmo. A real account.

Online merchants need a way to accept credit cards, debit cards, and other payment methods for their goods and services. PayPal simplified that, building trust along with convenience. But this is the end for PayPal. The first hint that something was off was when eBay, their previous parent company, separated.

PayPal already has a terrible fee structure, with high merchant fees, high transaction fees, and a flat-rate system for US business accounts.

PayPal’s new user agreement is a disaster, and you should avoid their service like the plague.

In a nutshell, PayPal has made their own rules. If you don’t agree with them, they will fine you $2500 and freeze or ban your account. Does that sound like a safety net for your business, or diving straight into shark-infested waters?

Get a payment processor designed for your business model. Whether you’re selling supplements, advice, life coaching, guns—there’s a merchant account out there that supports you. We can help connect you with it and the payment processor that will facilitate your transactions, no risk of bans or freezes.

Stay safe, leave PayPal, and get an account that works without the threats. DirectPayNet is here to make that happen for you. Get in touch now.

October 28, 2022
Payment Gateway vs Payment Processor Explained
If you’re a small business owner, chances are you’ve heard about payment processors and payment gateways. They sound similar and they both allow your customers to pay for products or services online.

But what’s the difference between them? And which one do you need? We answer all your payment questions below.

What is a payment processor?

A payment processor is a company that provides payment solutions for businesses. It will help you accept credit cards online and manage your transactions.

Payment processors can be third-party companies or a part of a merchant account. They provide the technology and infrastructure that allows your business to accept payments online, as well as manage them. Payment processors are often used in conjunction with payment gateways, which we’ll explain below.

A payment processor may also offer other services such as:
- PCI compliance (to make sure your business is safe from hackers)
- Payment gateway integration (so customers can pay with any method you accept, not just credit cards)
- Fraud protection
What is a payment gateway?

A payment gateway is a software that you install on your website to connect it to your merchant account. Merchants can use this software to accept payments from customers’ issuing bank and receive funds from customers, as well as transfer money directly into their acquiring bank accounts.

Payment gateways are essential to any eCommerce business. They allow you to accept different payment methods, including credit cards and alternative forms of payment like PayPal or Bitcoin. A payment gateway can also help you meet the standards for PCI compliance, which protects your customers from hackers.

The payment gateway is what your customers see at checkout. It’s the final page(s) asking for credit card information, address, CVV, shipping address, and other cardholder authentication info. It’s also what’s connected to a POS terminal (point of sale terminal; virtual terminal) or credit card reader to accept credit card transactions, debit card transactions, and digital wallet payments.

As a merchant, you can log into your online store’s gateway and view transaction data, namely decline codes. This allows you to better understand trends in declined transactions and information about your customers to better serve them.

What is the difference between a payment processor and a payment gateway?

A payment gateway works to grant you the ability to accept payments from a customer’s bank. A payment processor is the service that processes the financial transactions and removes them from your account.

So, in more concrete terms: A payment gateway is the tool that lets you accept payments from customers using their credit cards. A payment processor is an intermediary between your business and banks, which helps merchants process these transactions.

Working with the two, you can adjust functionality according to your business needs. For example, you can disable certain credit card networks or card types to avoid high transaction fees. You could, for instance, disable American Express and Visa while only accepting Mastercard.

Is Stripe a payment gateway or processor?

Stripe is a payment aggregator. It’s a tool that allows merchants to accept credit cards through their websites and mobile apps. Unlike many other payment processors, Stripe is not directly involved in processing transactions. Instead, it partners with banks to facilitate payments between them and its customers.

This also means that Stripe does not provide its merchants with their own merchant account. Those who sign up with Stripe use a sub-merchant account, instead, which doesn’t require an immediate underwriting process. Hence why it’s so quick and easy to sign up.

The drawback is that by using Stripe, you may be unaware of what businesses the company supports. In fact, they support a very limited number of businesses due to the Merchant Category Code (MCC) which essentially determines who is a high-risk merchant and who isn’t. Most online businesses are high-risk and Stripe is not afraid to shut them down.

Is PayPal a payment gateway or processor?

PayPal is a payment gateway provider that offers a wide range of services to merchants. It can be used as an online payment processor, but like Stripe it is known as a payments aggregator, and is often mistaken for a merchant account provider.

PayPal does not provide merchant accounts when signing up, but it does connect you with third party providers who do offer the ability to accept credit cards through your website or mobile app. The company’s platform will also allow you to accept payments from customers who have already stored their payment information on file with PayPal (if they’ve used the service before).

Is Shopify Payments a gateway or processor?

Shopify Payments is a gateway, not a merchant account. This means that when you sign up with Shopify Payments, your business will be able to accept online credit card payments through its platform.

It provides an API for third-party applications to use when processing payments. Shopify handles all the necessary validation on your website, but it doesn’t store any sensitive data like credit card numbers or passwords. That information is directly sent to whichever payment processor Shopify uses with your business. They have connections with multiple processors, which is why it’s called an aggregator. So it’s difficult to say exactly which processor your transactions are going through.

Shopify Payments is actually just Stripe, but relabeled to fit into the Shopify ecosystem.

And just because you might run your business through Shopify, you are not required to used Shopify Payments. You could even use the regular Stripe, PayPal, or another (better) payment processor.

What is the difference between a merchant account and a processor?

A merchant account is the bank account that the merchant uses to accept credit card payments. This can be a business checking or savings account, or an online payment solution like PayPal.

The processor is the company that accepts payments on behalf of your business and forwards them to your merchant account. The processor will forward all of the funds from customer credit cards through their accounts before transferring those funds into yours—which means they are essentially acting as a middleman between you and your customers.

A merchant account is what enables the entire payments ecosystem. Your processor and gateway take care of the rest, but are still essential for accepting online transactions.

At the end of the month, your merchant account or merchant services provider will send you a statement containing all the payment data and transaction details for the previous month.

You need both a payment gateway and processor to accept payments. And you need a merchant account to use both.

A payment gateway is the service that connects your store to your merchant bank account. You can think of it as the “gate” where money comes in. A payment processor is the service that accepts the payment from the customer, or “processor”. The merchant account is your bank account used to accept those funds (your “merchant”).

You cannot fully use a payment processor or a payment gateway without a merchant account. A merchant account is an essential part of the online payment process, since it allows you to accept payments from customers.

Stripe, Shopify, PayPal, and other popular 3rd-party PSPs get by without forcing you to open a merchant account because they essentially put your business underneath their own. But once you start making real money, eyes start looking in your direction. And that’s when trouble starts.

If you’re looking to start accepting online payments then it’s important to understand what they do before making a decision on which one is best for your business. Before you start signing up for the most popular or most common, get in touch with DirectPayNet.

We will assist you in selecting the right MCC for your business, setting up a real merchant account, and connecting you with a powerful credit card processing company that scales with you. Get in touch today.
August 8, 2022
Buy Now, Pay Later: The Hype Is Worth It

As a merchant, it’s really important to make the checkout experience as simple and effective as possible for your customers.

Buy Now Pay Later is an idea that has existed for decades but only recently have trends have aligned to see its success. It’s the future medium of exchange for all goods and services. If you’re not offering it yet, now is the time to start.

Merchants can offer a BNPL option without needing to change their existing payment methods.

BNPL gives merchants the ability to offer a new payment method that is convenient for customers, while still providing them with all the benefits of traditional plastic.

It gives retailers the opportunity to provide an enhanced checkout experience that increases customer satisfaction and loyalty.

One of its greatest benefits is that it integrates easily into your existing setup. So if you’re already offering digital wallet options (e.g., Apple Pay; Google Pay) Credit Card, and even PayPal, you can offer BNPL as yet another option.

It’s a great way to get in front of more customers without having to adopt new technologies or upgrade your POS systems.

Merchants who use BNPL see increased conversion rates.

The Buy Now Pay Later option is a great way for merchants to increase sales. By offering this payment method, you’re showing your customers that you trust them and are willing to give them the opportunity to buy something they may not otherwise be able to afford.

And since you’re charging interest on the amount of time it takes the customer to pay off their purchase, BNPL can be an even more lucrative option for merchants than credit cards. Keep in mind, if the customer sticks to the minimum weekly payment, it will be interest-free.

Customers feel they have more control over their purchase with BNPL. There’s a sense of security that comes with these payment options where customers don’t have to commit to paying a large lump sum. They can easily break it up into installments, which is better on their conscious, their bank account, and your conversion rate.

Buy Now, Pay Later can increase your customers’ average order value (AOV).

Buy Now Pay Later is an increasingly popular payment method that lets customers pay for their purchase over time. It can increase the average order value (AOV) of your store and reduce the number of refunds you have to process.

BNPL is a payment method that allows customers to keep their favorite items in their carts, pay for them later at no extra cost and receive them immediately. The merchant does not have to worry about collecting payments from the customers before shipping the products, because all payments are made at the end of the offer period — usually 30 days after checkout.

As long as your customers enjoy using this service, they will likely be willing to spend more money on each purchase they make using BNPL than they would otherwise. This means that your sales volume will increase too, resulting in higher average orders per transaction (AOT).

BNPL is a great way to tap into new customers.

BNPL is a great way to tap into new customers who do not have access to credit cards or want to avoid high interest rates.

By adding Buy Now, Pay Later to your checkout, you can increase your customer base and brings in new customers who may not have been able to buy from you before.

Your current customer base is one that can afford your products, right? But that group doesn’t consist of your entire audience. There are many people who can’t afford your products but are interested in them. BNPL makes your e-commerce business more approachable and, one could argue, more affordable.

Buy Now, Pay Later could also help build trust between you an potential customers.Consumers may feel more comfortable buying from a business that offers BNPL than one that doesn’t. They know that if they don’t have enough money to buy right away, they can still get their hands on the product they want through this payment option.

Many younger millennials and Gen Z folks prefer to use these BNPL solutions to create payment plans so their banks don’t drain away all at once. If you’re not already reaching these groups, this is your in.

Merchants aren’t accountable when customers miss a payment.

Buy Now Pay Later provides consumers with instant credit so they can make purchases without having to wait for a traditional loan approval process. It’s a great way to boost repeat sales and increase revenue while exposing your company’s products and services to more potential customers.

Moreover, merchants aren’t subject to chargebacks, late fees, or any kind of late payment-related issue if a customer misses their scheduled payment. That side of the payments system remains between the customer and the BNPL service that loaned them the cash.

BNPL has a range of additional benefits for merchants.

The major pros for using BNPL are related to customer retention and boosting sales. But benefits of Buy Now, Pay Later don’t end there. Here are a few more you can expect.

No Setup Fees or Monthly Costs

Merchants don’t have to pay any setup fees or monthly subscription fees when they use Buy Now Pay Later. Payment processing is included in the merchant rate, so there are no additional charges or fees on top of the regular transaction fee. The merchant’s rate is based on their specific business model and risk profile, so you can work out whether it suits your needs before deciding whether to accept this payment method.

It’s Easy to Use

The technology behind BNPL is simple, so it’s easy for customers to use too. There are no long forms or complex terms and conditions to read through when buying online, which can deter shoppers from completing purchases.

The Funds Are Available Instantly

Once a customer has chosen BNPL as their preferred method of payment, they don’t have wait days or weeks before they can start spending their money (as they might with traditional credit cards). The funds are available instantly, which means they’re more likely to shop with you again in future. And that means you get paid upfront.

Multiple BNPL Providers

Each Buy Now, Pay Later service has their own flexible payment offer. Some only offer a 4-part BNPL payment breakdown 2 weeks apart, others allow the customer to choose how long they want the repayment plan to be. Really, it doesn’t matter for you because you get paid up front. But maybe your customers prefer one provider over another. Test out each one, like Afterpay, Affirm, and Klarna.

Consumers Can Build Credit

One of the benefits of BNPL for consumers that you, as an online store owner, can use in your marketing is the ability to build their credit score. These financing options are great for customers with low credit or no credit. They don’t have to pay with debit, they don’t have to apply for a credit card, and they don’t have to get a loan. While there is a credit check that takes place, most customers get approved for some amount of money.

BNPL is the future of borrowing for consumers worldwide.

With this innovative payment system, merchants can offer a fast and convenient service to their customers and generate new revenue streams from existing customers.

It gives them more control over their purchases, giving them more time to pay when they are ready. The result is happier customers who are more likely to complete their purchases.

It’s no secret that the world is changing. BNPL is the latest change to blanket the payments space, and it deserves serious consideration for your store.

Can your bank handle the increase in sales volume?

Credit Card processing is important in today’s economy. A merchant account helps to drive business and increase revenue. Just don’t let the number of merchant accounts fool you.

Not all are the same and not all have the same approval guidelines. It all depends on your business, how far along you are, what industry you’re in, and how much revenue processing brings in.

If you’re adding BNPL services to bump up sales, it’s time to open a new merchant account that can support the volume.

DirectPayNet specializes in providing high-risk merchant accounts for online merchants who aim for 6-figure processing figures. Get in touch with us to secure your small business with the right merchant account today.

June 22, 2022
8 Ways to Recession-Proof Your Business

The economy is undoubtedly heading towards the next recession, and worse that the great recession of 2008.

With the ever-changing nature of how we do business, there is no doubt that with the volatility of the current economy (due in no small part to the coronavirus pandemic), we will have to deal with something similar to another financial crisis. So what can you, as a small business owner, do to ensure your business goes unaffected—or grows?

The main answer lies in the backend technology you utilize. Today, we’re sharing the top tips and tech you should incorporate into your own tech stack to recession-proof business operations.

Use a Modular Tech Stack

A business is only as good as the technology it uses to run. But what happens when the economy takes a dive?

In the early 2000s, a recession hit and businesses were forced to cut costs wherever they could. One of the biggest areas that suffered was IT. Many companies slashed their tech budgets and sometimes even laid off their IT staff. This led to long periods of downtime, slow service, and general instability in their systems — all of which scared away customers.

Fast forward 15 years later, and we’re facing another economic downturn. But this time, you don’t have to be caught off guard like so many other businesses were before.

A modular tech stack allows you to use different services without having to worry about integration or compatibility issues between them.

It also makes it easy for you to swap out old technology with new, more effective solutions without having to change any other components of your system.

This helps reduce the amount of time it takes for new technologies and capabilities to reach customers’ hands, which is especially beneficial during hard economic times when people are less willing (and able) to spend money on new products and services they may not be familiar with yet.

Track ROI for Each Tool You Use

In the midst of a recession, old and new businesses alike are expected to cut costs wherever possible. But that doesn’t mean you should stop investing in your company’s future.

In fact, now is the perfect time to reevaluate your business and make sure you’re using the best tools for your needs.

Make sure that you’re getting the most out of all of your investments by leveraging them together with other solutions that work together seamlessly — like accounting software and marketing automation software.

These integrated solutions allow you to save time by automating repetitive tasks and streamlining processes so that they take less time than they would if done manually (or not at all).

Monitor the ROI of each tool you use. ROI can be measured in cash flow, time, and productivity. So if you have tools that either overlap in functionality or don’t greatly benefit you, then consider removing them and investing that money elsewhere. Times may get tough, but that’s not an excuse to ignore the metrics.

Invest in Customer Service Tech

One of the most important ways to make your business recession-proof is by investing in customer service technology. This will help you better serve your clients and ensure that you con

The first thing that many small businesses do when they’re struggling with sales is to stop engaging with their customers. This is a big mistake because it leaves them out of touch with what their customers want and need.

Instead, entrepreneurs and business leaders should be using tools like live chat software or chatbots so they can engage with customers in real time and provide them with the best possible experience when they’re shopping online or on social media channels like Facebook or Twitter.

You want to ensure every interested customer is taken care of in the way they prefer. It’s the best way to keep customers connected with your store and guide them toward making a purchase.

Increase Customer Lifetime Value (CLV)

It’s important to understand how much it costs to acquire a new customer versus how much it costs to keep an existing one.

If you’re looking at a situation where it costs $5,000 for every new customer but only $1,000 per year for each existing one, it makes sense to put more effort into encouraging repeat business from your existing customer base rather than trying to bring in new ones.

The longer you keep customers around, the more money you make from them over time. It’s also easier to sell additional products to existing customers than it is to find new ones and convince them that they need what you have to offer.

A lot of businesses that do well during an economic recession include some type of credit score repair or credit building. Folks are worried about their credit and will do what they can to ensure they maintain good credit or don’t let their credit decrease even when they make large purchases. This is a great way to make your business recession-resistant and offer customers in your target market something of great value on top of what you already offer.

Provide More Up-Front Value

In tough times, consumers are looking for deals and discounts on everything from clothes and electronics to travel and entertainment — so make sure you’re offering them plenty of incentives when they first sign up for your service or buy from your store. If they know they’ll get something extra right away, they’ll be willing to pay more later on down the road when times are better again.

You can offer bundles to provide more items for less (at least less than if each were purchased separately), or you can start a rewards program to offer significant discounts to regular customers. There are many ways to provide more value upfront. The best method depends on your business model and who your customers are.

Set Up Automations for Payment Decline Codes

Automate as much as possible.

Automation can help keep your sales pipeline full even when there are fewer leads coming in because it means you don’t have to manually follow up with people who aren’t responding. It can also help you scale your business by freeing up time so that you can focus on larger projects and improving revenue streams.

But, possibly most importantly, setting up automations when a decline comes in will help you retain the customer.

For example, if a customer attempts to make a $100 purchase but gets declined due to insufficient funds, you can automate the next steps to give them a coupon code and sell the the item at a discounted price.

Offer Payment Plans

These days, people are more likely to buy things that they can pay for in installments rather than all at once. You can offer this option by making partnerships with a company like Klarna, AfterPay, or other lenders. Or developing your own software tool for it. The latter option can cost thousands of dollars, but the former is much cheaper.

And consider that offering a service that people are familiar with, like AfterPay, can generate more trust in your company.

This ties into the decline automations we mentioned earlier. If a customer’s transaction is declined, you can provide a discount, charge then a fraction of the price up-front, and offer a payment plan.

This gives your customer plenty of opportunity to get the product they want and ensures you make the sale.

Set Up the Right Payment Gateway for Your Users

In addition to accepting credit cards, consider accepting other forms of payment such as gift cards and debit cards that are tied to a checking account. These alternatives will help ensure that customers will be able to purchase from your store even if they don’t have enough cash on hand.

It’s also a good idea to implement payment gateway tech that offers one-click checkouts. This streamlines the checkout process, giving consumers a faster way to get the product they want as well as less time to reconsider and abandon the cart.

The payment gateway you choose is only as strong as the payment processor you work with. If you’re in direct response, dropshipping, or other high-risk industries then you need a high-risk merchant account to secure your business and your bottom line.

You’ll need at least 2 MIDs (for two payment processors) to offer customers the type of diversification necessary to stay above the competition. This is one of the best ways to recession-proof your business and conquer a difficult economic situation.

In a recession, the last thing you want to worry about is if your cart works. Get in touch with DirectPayNet today to open your merchant account and secure your business for the future.

June 10, 2022
Stripe Shut Down My Account — How to Accept Credit Cards FAST
You’ve just been cut off from credit card processing by Stripe.com, and you’re in panic mode. There’s no time to waste—you need to get your gateway back up ASAP.

Here’s the only guide you need to start processing credit card payments again after Stripe shuts down your account.

Follow along below, watching this episode on Youtube, or listen on the go on Spotify.

1. Open Another 3rd-Party Account

Hear us out: we know how often we tell you to never use Stripe and how bad they are for the longevity of your business. And you’ve already suffered at the their hands. Trust us when we say we’re not sadists.

You won’t be able to open an account back up. After Stripe account closure, that’s it. Stripe’s decision is final, even if you try to contact the Stripe support team for help. There’s a simple solution:

Open another Stripe account. Or PayPal. Or Square. There are tons of 3rd-party payment processors you can choose from. You know how fast it is to open an account since you’ve done it already.

This is the first step in sustainable online payment processing for your business. Open an account and within 24 hours, you’ll have a working payment gateway.

Keep in mind, this is temporary. You don’t want to get shut down again. So immediately after you open a new account with your chosen 3rd-party processor, you need to start working on Step 2.

2. Contact 3 Merchant Account Providers

Once you’ve got your short-term Stripe account waiting for approval, you can go ahead and look for real merchant accounts.

The Reason Your Stripe Account Is Shut Down

The reason your Stripe account was shut down is because the company is very strict when it comes to what type of business they support.

They aren’t a merchant account provider. In fact, they have their own merchant account with which they allow you to use as a sub-merchant.

Know Your MCC

Your merchant category code is what labels your business. You actually need one with each application, even on the one for Stripe. Some providers choose one for you or ask you a series of questions to have one chose automatically.

Knowing this code will help you understand the high-risk industry you operate in. If you’ve been shut down by Stripe and need credit card processing fast, you’re likely in a high-risk industry.

Those industries can be anything from coaching to dropshipping to adult content to subscription business models.

Seek High-Risk Merchant Service Providers

You are also free to get in touch with financial institutions about opening a high-risk merchant account on your own, but a payment service provider will have better connections and can streamline the process.

You should contact 3 separate providers because each provider has their own connections to credit card processors and banks. You want to maximize your reach so you can quickly get a real merchant account as soon as possible without too much compromise on rates and pricing.

Make Sure Banks Don’t Overlap

3 providers means 3 opportunities. You don’t want to contact 3 and have all of them give you an offer from the same bank. Or worse, a decline.

The more declines your business has, the less likely you’ll be able to successfully open a merchant account. Be cautious.

What you can do is contact the first one and ask which bank they’ve chosen. Then get in touch with the second provider and inform them to not use that same bank. The same for #3, informing them of the other two banks you’ve applied with.

3. Prepare an Application Package

This step should be performed at the same time as Step 2 because you’ll want to use it with each provider. But when you need credit card processing ASAP, getting in touch with a good provider without an application package if the opportunity arises is perfectly fine.

Every time you apply for a merchant account, there are several things that you always need. You might as well create a folder to easily access these files so you can submit them faster and get a response about your merchant account application quickly.

Since Stripe shut down your account, you don’t want to waste any time gathering the same documents for every contact.

What to Include

Here’s what you want to include in your package:
- Bank letter or voided check to confirm where funds will be deposited.
- Previous processing history, which means you should download your Stripe processing history while you still have access to your account. CSV files are not accepted, it has to be a PDF with a summary of monthly sales, chargebacks, customer disputes, etc.
- Bank statements so the provider can see your previous 3 months history.
- Business info “cheat sheet“. If you have a member’s area on your site, you should provide a login for the provider. If you sell multiple packages or a lot of products, this is where you can provide a brief overview of what’s going on in your business. The cheat sheet is no more than 1 page.
All of these documents help to give the merchant account provider a quick and easy way to confirm if they can support your business or not without risking a decline.

4. Don’t Worry About the Tech Stuff

Stay focused on simply getting that temporary Stripe account open and your merchant account applications going.

There’s Always a Solution

Of course, you want the processor you end up with to be compatible with your gateway and so on, but that’s always possible with a plugin or API integration. As long as the processor works with the credit card companies (Mastercard, Visa) and payment options your customers use most, then there’s no technical stuff to worry about.

So don’t worry if you work on Shopify, which has limited direct plug-and-play functionality with gateways and other payment functions. You’ll be able to connect you cart in one way or another.

Focus on the Merchant Account

Get the new merchant account, get approved, and then you can deal with the tech stuff.

If you get bogged down early on, then the process of getting a long-term solution to processing credit card payments on your online store gets further out of reach. You need to prioritize the merchant account, and then tackle the little things.

5. Prep a Licensing Agreement

This is an if-all-else-fails plan. If your closed account on Stripe leads to a ban, no one is accepting your merchant account applications, extremely high chargebacks, or you get MATCH-listed, this is your last hurrah.

You want to keep selling, you have a profitable business, but you’ve unluckily reached this worst-case scenario. That’s where a licensing agreement can help.

Do not hesitate to get in touch with your affiliates or potential partner business owners and ask them to sell the products for you.

You would license out your product or service to these other people, they would sell on your behalf for a percentage of the sales.

We know it doesn’t sound appealing, but if you believe in your ecommerce business and want to get it back on its feet, you should be willing to take the hit for a few months.

Take Your First Step Now and Connect with a Merchant Account Provider

In the end, time is of the essence – you don’t want your business to miss out on valuable sales just because Stripe has frozen your account. Follow the steps in this blog to get back online successfully.

You can start Step 2 now by getting in touch with the team here at DirectPayNet. We specialize in providing merchant accounts for high-risk businesses and will be able to connect you with a payment processor and bank that will support your account.

Contact us today to start your application.
May 18, 2022