DirectPayNet

Category: STRIPE

  • FAQ Friday: What to Do If Stripe Is Holding Funds or Terminates Your Account

    FAQ Friday: What to Do If Stripe Is Holding Funds or Terminates Your Account

    The panic-stricken, adrenaline-induced frenzy of researching solutions about what to do when Stripe holds funds—or worse, terminates your account—has been performed by countless merchants. If that’s any reason to relax a little then take it, because it means there is a solution.

    In fact, there are solutions to cover every aspect of this type of situation whether it’s with Stripe or some other processor. And most importantly, we’ll show you how to get your business back up and running with minimal impact to cash flow.

    Always Remember That Stripe Is in Control

    Companies like Stripe are great to get up-and-running in an instant. They’re quick to approve your account and get set up. But if you start scaling too quickly, it makes the platform nervous. And that makes them very quick to shut down businesses and force account cancellations.

    3rd-party Platform Rules

    Stripe.com is a 3rd-party processor similar to PayPal. That means you run on their platform and follow their rules. They have the power to control which businesses they support, which businesses they don’t, and who can continue using their platform at any given time. It’s in the user agreement when you sign up for your account. A lot of sellers see Stripe as a difficult to work with, but their terms are clear for those who read them.

    They Rarely Reverse Decisions

    Unfortunately, if your account is terminated or funds are withheld, Stripe will rarely reverse their decision. Your account likely won’t get reinstated and your funds won’t be returned to you right away and additional information would be required to get your funds are no longer held.

    You can still try to convince them otherwise, but your efforts are better placed in opening a new merchant account with a different payment processor for your cart. You might even be able to open another Stripe account if you haven’t been blacklisted.

    Why They Hold Funds

    Usually, you will receive an email from Stripe saying something along the lines of “your account is closed because you violated our terms and conditions.” There’s very little detail, which might leave you wondering what you did wrong. Customer support will provide little information as well adding to the mystery.

    If they hold funds or terminate your account, it’s likely because you are a high-risk merchant or have high chargebacks. Sellers of supplements, subscriptions, advice, dropshippers, and more are all considered high risk. There’s a seemingly endless list for what constitutes high-risk sellers, and Stripe doesn’t support any of them.

    You Will Get Your Money Back…Eventually

    It takes time to get your money back, but it will happen. This period is something we like to call the “chargeback guarantee period” because it makes up the amount of time (and then some) chargebacks will occur. This is usually 6 months, but they sometimes hold funds up to 9 months.

    You can think of it like a forced reserve, where they hold money from you in case of refunds and chargebacks. That way, the bank isn’t risking their own finances because they have a pool of your funds to dip into. It helps your account avoid having a negative balance and you from paying even more Stripe fees.

    If you want your money sooner, it’s possible to get some of it back before that 6-month period. Keep in mind that Stripe needs to keep a portion of the withheld funds for chargebacks and other transaction fees. Knowing this, call the Stripe support phone number a couple of weeks after receiving the initial notice and negotiate with them to return part of the funds, not all of them. Those initial weeks are a period in which Stripe is waiting to see if and how many  chargebacks. Your chances of negotiating a payout schedule with their customer support team are greater if you receive little to no chargebacks.

    They may not agree to negotiate, in which case you’ll get your payout in 6 months, sometimes 9 months if you are high-risk or have large amounts of chargebacks.

    The Most Important Thing Is to Get Payment Processing ASAP

    Don’t get caught up on resolving the issue you have with Stripe right away. You’ll likely have to wait some time before anything happens with them. And the longer you wait, the less opportunity you have to make sales. So focus on obtaining a merchant account or payment processing solution ASAP to get your store going again and start accepting card payments.

    Open Another 3rd-party Account

    Yes, Stripe.com is a 3rd-party processor. Yes, Stripe terminated your account or withheld funds. Yes, that could happen again. But right now, you need to get your payment gateway operational, and the fastest solution is to open another account with a 3rd-party provider, even if that means paying higher processing fees or having a longer payout schedule for your settlements. Also, consider adding ACH to your checkout for lower cost and having an alternative payment method.

    3rd parties are quick to approve and get you set up fast. Getting a more appropriate payment processing solution can take a week or longer, which is a lot of time to waste in wait. A 3rd party will get your cart working so you can accept debit and credit card payments and keep your business going while you apply for more direct solutions. As a business owner, your primary goal is to ensure your ecommerce business can remain profitable and continue to accept credit card payments.

    You can try reapplying with Stripe, use PayPal, or find another option—there are tons of 3rd-party processors out there. These platforms are a great first step for startups and small business owners who don’t have processing history yet, helping to get set up fast and building history. This will ensure your cashflow is not affected by waiting for Stripe to reverse their cancellation decision.

    Apply to 3 Merchant Account Providers

    Not 3rd-party providers like Stripe or PayPal, but 3 high-risk merchant account providers like DirectPayNet. Providers like us are an ideal solution moving forward because we understand your high-risk business, the risks associated with it, and how to get you set up for the long run.

    Why 3 merchant accounts? Because there’s no guarantee that you’ll be approved. If you only apply to one, wait the week or so it takes for your application to be reviewed, and then get denied, your e-commerce store will be non-function for even longer. Now you have to do the process again and keep waiting. It’s not a good strategy when you’re trying to keep business moving.

    This is important: do not apply to 3 providers that use the same bank or acquirer. Payment processing providers like us work with many banks to get you a merchant account. Make sure the bank we present to you is not the same bank another merchant services provider presents to you. When you’re presented with a bank by one team, notify the other 2 that you have been presented this one bank and therefore would like to use a different bank if possible.

    Prepare an Application Package When Looking for Providers

    There are a few documents and items that every payment solutions provider requests. It’s in your best interest to keep all of these documents in a folder, ready to send along to speed up the process.

    What you’ll need:

    • Voided check or bank letter – confirms where your funds will be deposited
    • Previous processing history ­– download this from Stripe as soon as possible, but make sure it’s an actual statement (PDF format), not a CSV file
    • Bank statements – have at least 3 bank account statements ready, one for each of the past 3 months that shows account balance and transaction history. Also, it shows your account balance which can help the application if there is positive cash flow
    • Business info cheat sheet – makes it easier for processors to get at-a-glance info about your business so they can decide if your business model is supported or not in the first place

    The cheat sheet speeds up the approval (or denial) process by giving providers a quick summary of your business. This way, if there is no question that they don’t support your business model, then they can deny you faster and you won’t have spent so much time applying. The cheat sheet is one single page and says what you’re selling, how you’re selling it, what type of pricing you offer, and who you’re selling it to (in the world). Therefore, you should include login info for a member’s area, a pricing breakdown if you sell a lot of products or have monthly packages, and a brief overview of your business including which currencies you require in case you need more than USD.

    Again, the application package is no more than a page and should be saved in a folder that’s readily accessible. The processor might request additional information later on, but the list above makes up the essential items you need to have on-hand.

    Don’t Worry About the Technical Stuff

    We understand that you want your payment processing provider to work seamlessly with your cart. For example, if your store is run on Shopify, it makes sense that the payment gateway you work with connects with your cart.

    There is always a solution out there, so stop focusing on compatibility and start focusing on getting a payment provider that meets your needs. If the payment solution that works best for you doesn’t seamlessly integrate into your store’s platform, we guarantee there is a 3rd-party plugin, API, or zap that will make it work. Worry more about what payment methods your store needs to accept, like debit and credit cards on popular networks like Visa and MasterCard as well as ACH, and find a processing company that can provide them.

    Most payment providers will help you with this, so focus more on getting your shop going and less on the technical aspects of it.

    Side note: you also don’t have to worry about subscriptions. Subscriptions can be exported by another gateway, so there’s no risk in losing subscription revenue.

    What to Do When All Else Fails

    If you’ve been match-listed (put on a blacklist) and cannot use Stripe, you’re not being approved by any of the merchant account providers you’ve applied to, or you’ve gone too high on your chargebacks and no one is willing to approve you, there’s still a solution. Have a licensing agreement ready.

    Create a licensing agreement for your products, content, and services for affiliates to resell for you. If you have potential business partners, ventures, or affiliates, now is the time to use them. It’s not the most elegant solution and you’ll have to give them a cut (say, 80/20), but this is the last-resort option you have.

    If Stripe Is Holding Funds from You, DirectPayNet Is More Than Willing to Help.

    Contact our excellent customer service team for help on what to do next when Stripe withholds funds or terminates your account.

     

    We’ll get you set up with a high-risk merchant account, answer any questions you have about next-steps, and get your business back up and running in no time.

    For more info about what to do if Stripe is holding your funds, have a listen to my podcast episode discussing this in more detail on Youtube or Audio version for Apple podcast or Spotify. Click on the links to listen in!

  • Alternatives to Paypal for Freelancers

    Alternatives to Paypal for Freelancers

    Bloggers and other freelancers use Paypal to receive payments for their products and services. While the platform is generally excellent in offering great monetary transactions, it is just as important to take note of its cons that can impose limits in online payments processes. If there was a way to reduce your hassle and time in making transactions, would you still stick with using Paypal?

    Why Freelancers Turn to Paypal Alternatives

    Are you experiencing several issues in using Paypal? As per thousands of freelancers worldwide, the platform’s uncertain behavior and processes lead users to find better alternatives. The transaction charges are usually higher and continue to increase over time. It’s hard to ignore this kind of disadvantage as you continue to thrive in the digital world.

    Payment methods don’t have to be stressful, as long as you’re on the right platform. Many professionals and owners of small businesses in the e-commerce industry rely on bank transfers and payment services that can improve transactions for monthly fees or salaries and maximize the salary revenue without being bombarded with heavy transaction fees, unreasonable conversion rates, and exchange rates.

    Best Paypal Alternatives

    Found below is a list of a couple of the best Paypal alternatives that can guarantee hassle-free payment processing fee outlets for all freelancers in their daily hustle.

    Payoneer

    Online service providers such as virtual assistants, copywriters, bloggers, and other types of freelance or online businesses can use Payoneer as a tool in receiving and paying money overseas. One of its most impressive factors includes being available in most countries, even in India and Pakistan. Through a Payoneer account,  European and USD currency conversions can be easily accepted.

    Moreover, transaction fees for Payoneer are surprisingly lower even though there is more money to retrieve. That is a huge benefit for SEO, Upwork, WordPress, and other flexible online careers who mostly work with clients abroad. Payoneer is a mobile app that you can quickly download and sign up for free. Plus, a user gets a bonus of $25 right after initiating a transaction worth $100. This method is for bank transfers and does not allow credit card payments.

    Skrill

    Skrill is a type of payment method that is formerly known as Moneybookers. Its prime offers are evident in its best currency conversion rates. Accomplished in over 200 countries, Skrill can process multiple international money transfer transactions with no complex process. You may want to switch to Skrill if you have been looking for a wire transfer tool that is flexible enough with its offers and events.

    You can use Skrill to upload funds in whichever payment method, including Mastercard, Visa, local banks, and many others. Although the verification process in Skrill is quite tougher than most payment options, its service is very much worth the work.

    Xoom

    Apparently, there are Paypal accounts from different parts of the world that have been restricted. Most of these accounts originated from India. Freelancers from the said country needed to find another payment processor, payment gateway, or payment solution to sustain their monthly fee transactions. And from such a dilemma, Xoom saved the day.

    Xoom can receive the same funds from Paypal without reducing the money you receive. The mobile app is available across 38 countries, offering great money transfer services and customer support anytime, anywhere. If card payments are not always the answer to the sudden loss of online payment tools, you know there’s the Xoom mobile app that you can rely on.

    Payza

    Similar to Skrill, Payza was first introduced as an Alertpay site. Payza today contains identical features with Paypal. It facilitates online transactions for freelancers, business owners, and entrepreneurs for money transfers, payments, or salaries. Just like a Paypal account, you can access Payza by setting up a free personal or business account. It usually depends on your needs, but regardless, Payza works perfectly for almost all users.

    Payza sets the bar of being one of the processing fee platforms that lets you send money across the world for free — and in less than a minute. Money transfers and online payments are accepted from over 190 countries where Payza is available.

    Stripe

    Making sure that freelancers or business owners meet halfway with their clients or customers is the goal of every payment platform. It just so happens that Stripe is known to be the top choice for such a service. Stripe is hailed as one of the best PayPal alternatives, thanks to its flexible deals and multiple payment and checkout options, including Visa, JCB, Mastercard, and American express.

    The most excellent feature of Stripe is its guarantee of over 100 currency conversions. For you to successfully receive payments, the freelancing transactions must be based in Switzerland, Netherlands, Luxembourg, France, Belgium, Norway, Spain, Denmark, Italy, Sweden, Austria, Germany, Belgium, Finland, Australia, United States, Canada, Ireland, and the UK. Each transaction gives the platform a total of 2.90% to 0.30% in commission, which is cheaper than PayPal. Furthermore, Stripe is a mobile app that can easily be downloaded on any Android or Apple cellular phone. Take note that Stripe can get quite strict if there are any disputes so it is important to mitigate any risk of fraud on your account.  Also, their currency conversion rates are best suited if you are processing under 10k/month.  Anything above, you are best to get a dedicated merchant account and trade currencies through a broker.

    Transferwise (now Wise)

    Did you know that your clients can send their fees in your local currency conversion directly? Transferwise is a smart e-commerce platform that processes money transfers to your official personal bank account. In short, you don’t need to scratch your head about poor conversions as all your transactions will be considered as a local transfer. The clients will be the ones to pay the processing fee in transferring the payment.

    While Transferwise is a surplus choice in the line-up of Paypal alternatives for freelancers, it also has lower transfer fees compared to other direct wire transfer or payment services. Transferwise uses the exchange rate of XE and Google.

    However, it also has its cons. Enormous or small business payments are not accepted in some countries. It would be best to check your country page before acquiring a business payment status and pricing. Transferwise also doesn’t have an invoicing feature so you will need another solution to keep track of your account receivables.

    Square

    Also highly considered as one of the best Paypal alternatives for freelancers, Square is packed with a card reader that works perfectly for Android smartphones, iPad, iPhones, and other Apple devices. One of the perks of Square is that it can be created for any online store by customers. Promoting zero hassle payment processing, the Square card reader supports Mastercard, Visa, American Express, and similar options.

    Square is a kind of payment system that initiates plugins and accepts payments even from the 2015 Apple pay. Payment services come in various offers, but the key to having a distinct service is unique and functional features that prioritize payment solutions much better than most debit card, credit card, atm, and invoice transactions. Also, this helps you avoid certain chargeback circumstances. Square has higher international fees so it is best suited for local transactions.

    Amazon Payments

    Amazon, the most popular online store website, launched Amazon Payments, which was made possible in order to be a single platform gateway designed specifically for customers, businesses, and developers. The site has a purchasing store that has been simplified according to which payment procedure is available on the site.

    Aside from these relative aspects, Amazon Payments assists consumers in paying or receiving money and comes with other features that can improve a user’s experience. The Amazon facility is restricted to non-US residents. Amazon Payments (API) is a payment solution that brings no hassle when it comes to sending and receiving money.

    Bitcoin

    It is without a doubt that cryptocurrencies are one of the biggest influences of digital financing. Bitcoin is known as the biggest and famous cryptocurrency in the realm of online trading. However, it is also a platform where users can receive and send money across regions even without a money transfer operator or bank to successfully process the transaction.

    Bitcoin is quite familiar to many business enthusiasts, and if your client agrees to use it for your freelancing payment system, then they can just transfer the crypto into your Bitcoin wallet of your choice. After the transfer, you may proceed with currency conversion and refer the amount to your local currency. The money is now ready for online store payments, such as on Shopify, and other courses of payment solutions.

    2Checkout

    The 2Checkout payment solution is at your service for all your needs when it comes to processing online transactions. Many freelancing professionals gave positive remarks for this tool as it surpassed Paypal in so many aspects. Charging a one-time fee, 2Checkout has an initial fee for signing up.

    It also imposes a commission fee worth 5.5% for every transaction, together with a $0.45 USD fee. Although 2Checkout has more fees compared to other payment methods, it has a great money transfer service fit for almost any transaction. Its a flexible solution for emerging markets.

    Google Pay or Wallet

    You can manage your online transactions either for sending or receiving money through Google Pay or Google Wallet. It will serve as your digital wallet that is helpful in storing loyalty cards, credit cards, and debit cards. From there, you can wire transfer your money using your Gmail address or phone number to your friends or family members.

    Conclusion

    Dwolla and QuickBooks are also available for your online transaction needs. Credit cards are the quickest and preferred way to pay by most customers.  If you’re scaling your freelance business and getting close to 10k or above, getting your own merchant account will save you fees compared to popular options like Stripe or PayPal.  Also, you can avoid costly exchange fees by charging in various currencies.  Contact DirectPayNet for your merchant account, save money add currencies and maximize your profit from freelance work.

  • How to Secure Your Career as a Business Coach with a Merchant Account

    How to Secure Your Career as a Business Coach with a Merchant Account

    There’s no doubt that business coaching is a lucrative career. It’s a service that reaches any and all business types. From startups looking for help on maximizing growth to established businesses seeking assistant with staying relevant, there’s always a market.

    As the world moves furthering into remote and online-only experiences, having an online storefront for your business coaching services is incredibly important. While there are many easy ecommerce site builders like WordPress, not all payment gateways work with business coaches which are high-risk.

    Coaching Businesses Are Considered High Risk

    Many Business Coaches Sell High Ticket Programs

    There are several reasons why a business type might be labeled high-risk. For a business coach, one of the biggest reasons is because of high ticket services. When selling an expensive service online, there’s a greater risk for loss when it comes to chargebacks. That’s a red flag for banks and credit card processing.

    Chargebacks occur when a customer wants to request a refund directly from their bank or payment service (e.g., PayPal) without contacting you. The bank issues a refund to them, takes the money from your account along with a fee. That fee is exceptionally high for high-risk businesses.

    Chargebacks also occur with businesses that aren’t labeled as high-risk. So why do they treat your coaching business differently?

    Because You Sell Intangible Services

    In fact, business coaching can easily be described in more than one category that constitutes high-risk businesses.

    You’re selling a service, not a product. There is a risk associated with selling something that can neither be physically received nor objectively validated. Essentially, the reputation of your company rests on how much your clients enjoy your service. If a client did not get the outcome they expected from your seminar/meeting/program, then they often request a refund through their bank. That can lead to chargebacks which banks want to avoid at all costs.

    Selling subscriptions or tickets to future events (i.e., setting up a meeting that’s been paid for in advance, or tickets to a future seminar) is another red flag for banks. If the customer isn’t receiving their product right away, then there’s potential for cancelations that lead to chargebacks.

    Both of these paint business coaching or high-risk businesses, in general, in a completely negative light or as if chargeback ratios are through the roof. That’s not necessarily true and you shouldn’t be deterred from starting your business. Merchant accounts designed for high-risk businesses should have chargeback and fraud protection, like what you’ll find with DirectPayNet.

    There Are Great Fluctuations in Sales

    Following high ticket services, many high-risk businesses have great fluctuations in sales. One day you might sell hundreds of thousands worth of products/services followed by a heavy drought. Again, the biggest issue with this is chargebacks.

    Businesses that aren’t labeled as high-risk also have fluctuations in sales, but not as drastically. Banks want some level of steady income so when a chargeback occurs, there is money in the account to withdraw from. With high-risk businesses, banks might have to withdraw from a depleted account or send a positive account into the negative, and that’s not good for their bottom line.

    High-Risk Merchant Accounts Ease the Restrictions (and Fees) for Businesses

    Services like Stripe and PayPal are convenient and well-known across the world. But they enforce a lot of restrictions and charge high fees for high-risk businesses.  Stripe suspends merchants often if there are a couple of disputes. So, while it is possible to use these services to some extent for your business, it will more than likely be met with account freezes and severe losses in profit. Read more about the risks of working with Stripe here

    To remedy this situation, high-risk merchant accounts offer the same ease-of-use customers enjoy without the constant fear of having your account closed. They allow you to scale your business without worry.

    All Major Credit and Debit Cards Are Accepted

    With merchant account services, you can expect your site’s checkout to allow debit card and credit card payments from all major providers. Mastercard, Visa, and even bank account transfers are possible.

    The attraction for sellers to use a service like PayPal is often related to its convenience and familiarity. But PayPal is rarely the only option available on any online storefront for buyers. Many of the issues faced with Stripe, arise when dealing with PayPal. You don’t want your PayPal account frozen because of a misunderstanding with a customer. Also, buyers expect multiple payment methods and not all buyers even use PayPal. So, your safest method is to use a merchant account that can cover the most widely used payment systems.

    Merchant Accounts Offer Fraud Prevention

    One of the biggest pain points for issuing banks and other services is the risk of fraud and chargebacks associated with high-risk businesses. Specifically for the business coaching industry, performing business online or over the phone increases the risk of fraud.

    Your coaching merchant account portal and representative will help you avoid fraud. Designed around high-risk merchants, merchant accounts are adept at identifying fraudulent behaviour and suspicious activity before it’s too late. You’ll be protected against fraud, not punished if it happens.

    You Have the Flexibility to Grow

    One of the greatest benefits for operating an online business is the potential for exponential growth. Merchant accounts help you scale—even worldwide, whereas many other online payment gateways either don’t have global functionality or force expensive upgrades.

    With a high-risk merchant account, payment processing solutions match your needs as a business owner. Your representative will work use their ongoing relationship with banks to provide the functionality you need.

    Your monthly volume limits can easily increase as you continue to produce low chargeback ratios, which the right merchant account provider should assist with.

    Chargeback Protection Is Included

    A good high-risk merchant account includes some level of chargeback protection. After all, chargebacks are one of the deciding factors payment processors use against you. Merchant account providers, including DirectPayNet, help you stay on top of chargebacks to ensure they don’t hinder your growth. You can flag suspicious sales and utilize metrics like fraud or chargeback ratios to help you stay aware.

    Security for Your Business and Your Customers

    Payment providers often put protection for the customer above everything. And that’s a great thing, on the surface. But in the end, the bank or provider is what allows a chargeback to happen by accepting the request from a customer. Customer support should be available for both parties: the seller and the buyer.

    To manage this risk on the seller-side, merchant accounts give you quality analytics of performance, buying, and safety metrics related to the payments you receive (e.g., credit card transactions. In addition, a good merchant account representative will help you craft and enforce a strong refund policy. Your policy should reflect the needs, concerns, and trends of the customer while protecting your business.

    Don’t let banks hold you back. Use a merchant account for your coaching service—whether it’s as a business coach, life coach, relationship coach, or otherwise.

    DirectPayNet’s merchant services services will help your business stay live, online, and scale. With the right tools, there is unlimited potential for growth. Tools not only include consumer-facing payment options, but also protections for your business. Our representatives will analyze your business needs and use their connections with issuing banks to give your business the payment gateway it deserves.

    Contact us today and we’ll guide you through the merchant account application process as well as inform you of the benefits you can expect for your growing business.

  • Why You Should Consider PayPal Alternatives For Your Store Checkout

    Why You Should Consider PayPal Alternatives For Your Store Checkout

    On the surface, PayPal is an easy option for both users and merchants. It’s a service that everyone around the world is familiar with. It pioneered the idea of using a third-party service as an e-commerce checkout for added security and ease-of-use. But the service is not as simple as it seems, especially for e-commerce businesses selling certain merchandise that’s considered high risk.

    Between the additional fees, increased rates, and concerning service availability, PayPal alternatives are a much more attractive option for sellers. And while people may be drawn to use PayPal due to its simplicity, alternatives rarely sacrifice ease-of-use.

    Weighing the Pros and Cons of PayPal for Online Payments

    There is always a balance between user needs, merchant needs, and service features. Before choosing your preferred online payment method, it’s always important to weigh the options and needs. Otherwise, your decision might lead to unreliability as a seller or complete closure of your business.

    PayPal Pros

    It’s easy to set up and start using a PayPal business account. There’s no need for customers to have their own account in order to make purchases, which makes it accessible to everyone. However, it’s likely they are familiar with the service as PayPal has been around for a long time, becoming a household name. It started as an eBay payment processor and quickly grew into its own. That familiarity often equates to security, especially for the user. Users are protected against fraud or theft and can simply dispute any charges made. Plus, users don’t necessarily need a PayPal account to use most of their services.

    PayPal also makes it easy to integrate with shopping sites like Shopify or other e-commerce platforms. For a lot of businesses, the processing fees are also comparable to alternatives.

    PayPal Cons

    Depending on the type of business, service fees can be through the roof. If you’re selling products like vitamins, supplements, CBD, and adult content, you can expect higher usage rates, if you’re even allowed to operate using these platforms. These businesses, though completely legal, are considered high risk and are subject to stringent conditions in order to use PayPal—if the business is allowed to use it at all. If a business is caught using the service outside of its allowed use, then PayPal will immediately freeze accounts, hold funds for months on end, and shut down merchants.

    Familiarity attracts exploitation. Phishing and scams are two of the biggest issues with the service. In fact, phishing increases over 110% year-over-year. And though the service updates its security often, it doesn’t deter acts of this nature from happening and taking advantage of both users and businesses.

    Businesses are subject to account limitations in the event of a dispute, which can seriously hurt sales and refunds. All too often, businesses are shut down due to frozen accounts. This mostly happens when a chargeback occurs, where the customer requests a refund from PayPal instead of from you.

    Speaking of chargebacks, PayPal’s chargeback fees are around $20 on top of the amount needing to be refunded to the customer. Business owner’s return the payment, lose the amount paid for shipping and transaction fees, and then pay an addition fee to PayPal. The cost can add up fast. In addition to the issue of potentially getting shut down should a few chargebacks come in.

    It’s widely understood that PayPal customer service for businesses is terrible. There’s a division between the PayPal customers know and love and the PayPal that businesses deal with. There’s not much support for fraud on the business side of things. And trying to resolve a dispute can take months simply due to slow response times.

    PayPal alternatives, like the merchant accounts from DirectPayNet, are much friendlier to online businesses and offer user-friendliness alongside security for both parties.

    Businesses Requiring PayPal Alternatives

    Some business types are restricted by PayPal and must use an alternative service. These can be summed up as either high-risk, selling controlled products, requiring a license, or are morally problematic.

    High Risk Business

    Businesses that are considered high risk are those that procure (possibly or actually) excessive chargebacks. A small business may also fall under this category if it has little credit card processing history or if sales result in high dollar transactions.

    Chargebacks are understandable to an extent: PayPal and even PayPal alternatives aren’t inclined to handle a business’ refunds for a number of reasons. Especially if sales fluctuate and the few days you do make sales, the amount is incredibly high.

    Business Selling Controlled or Regulated Products

    Selling products that are regulated in any way are frowned upon by most payment service providers. If a substance or product requires the user to be licensed or if product, itself, must be approved by some governmental agency prior to being sold, then that makes for an unattractive business in the eyes of PayPal.

    Any product that makes health claims like vitamins or dietary supplements, or requires location and age restrictions like weapons or CBD are likely prohibited for use by PayPal and several PayPal alternatives.

    Businesses That Are “Morally Problematic”

    This criterion is completely subjective and can change in the blink of an eye according to a payment processing company’s stance on any one topic.

    Morally problematic businesses fall along the same lines as the previous category: those that sell weapons, supplements, or chemicals. Federal laws affirm their legality, but states differ and so does public perception. “Morally problematic” equates to PayPal and alternatives not wanting their reputation muddled by an industry that may not be wholly accepted by the public.

    General List of Products and Services Prohibited or Restricted by PayPal

    The following is a generalized list of products and services for which many payment platforms won’t allow their service to be used:

    –       Firearms, ammo, and other weapons

    –       Adult material

    –       CBD products

    –       Pseudo pharmaceuticals or supplements (vitamins, dietary supplements, etc.)

    –       Drop-shipped products

    –       Products with questionable outcomes (lottery tickets, tarot card readings, advice, etc.)

    If your business falls under any of these categories, you should consider opening a merchant account. Most merchant accounts, including the ones provided by DirectPayNet, are designed around businesses in these categories. They offer much more value and security without the risk of disruption to doing your business.

    The Best PayPal Alternatives to Consider

    PayPal may be one of the most widely known payment options around, but it certainly is not the only option available.

    Stripe

    Stripe is a great option for international payments as it only requires one APi integration for worldwide use. It’s the most widely used PayPal alternative out there for most stores and is what powers Shopify’s own payment solution. However, Stripe falls under the same rigorous guidelines for high-risk businesses. So if you’re not considered high-risk, this is a great alternative.

    Shopify Payments

    It would make sense to use Shopify Payments if a store is running on the Shopify platform. However, Shopify Payments is just a rebranded Stripe and it specifically states that the products mentioned above can be sold on the platform but the payment system cannot be used for it.

    Skrill

    Skrill is also a good international payment gateway and has a very low cross-border transaction fee. It does allow high-risk merchant use and does not use morality as a deciding factor in what can be sold through its payment gateway. However, Skrill is not a high-risk merchant specialist and often mishandles fraud activity as well as freezes merchant funds.

    WePay

    WePay is comparable to PayPal, Skrill, and Stripe in terms of pricing. It is meant for international orders, though, and is owned by Chase Bank. This means you can expect highly stringent terms and conditions, especially for merchants selling any of the products mentioned earlier.

    2Checkout

    2Checkout has an interesting feature that ensures your business adheres to laws and regulations. This is especially useful when selling internationally, which they allow. However, they have a somewhat higher fee than the competition and do not allow all business types to use its platform. Therefore, it’s not a good option for high-risk merchants (or merchants looking for a better rate).

    Amazon Pay

    Amazon Pay looks is a great alternative—for Amazon customers. Buyers are required to have an Amazon account in order to make a purchase. While it’s pricing is the same as Stripe and Skrill, it’s only for US domestic transactions and is absolutely not available to sell/purchase any of the above items.

    Digital Wallets (Apple Pay, Google Pay, Venmo)

    Apple Pay is, in short, not a great option unless you work entirely in the Apple ecosystem (iOS, iPadOS, etc.) and so do your customers. It’s an all-in-one service designed entirely for Apple enthusiasts. There is an Apple Pay plugin for sites as a payment processor, but again it will only work for Apple users.

    Google Pay is better and more widely use—it can also be used for CBD sales!—but it works only by emailing invoices or with Android customers.

    Venmo works in roughly the same way. It can be used by merchants, but not as a payment gateway. It’s more for instant transfers between consumers. In fact, their whole gimmick is about splitting bills and other shared costs, ensuring consumer payouts between one another. Venmo is actually a service from PayPal, so you can be sure that even if it had shopping cart functionality, it would most likely mirror that of PayPal’s terms.

    These are digital wallets—mobile apps—designed around users, money transfers, and mobile payments. While they can process credit and debit cards, they don’t give you the tools needed to manage your business’ financials.

    TransferWise (now called Wise)

    TransferWise (Wise) offers the real exchange rate for international transactions, which is up to 19 times cheaper than PayPal’s. However, Wise isn’t a payment gateway. It’s more of a digital wallet that you can use to invoice customers. In fact, Wise accounts are a series of bank accounts for each currency needed, partnering with banks around the world.

    Dwolla

    The most interesting thing about Dwolla is that it works with any bank by tokenizing card details. While that sounds appealing, they charge an insane amount per transaction (or an incredibly high monthly fee). They also have several merchant complaints filed against in regards to rip-off reports.

    Payoneer

    Payoneer is designed specifically around international sales, mostly involved ACH and bank transfers. It accepts nearly every currency. However, a Payoneer account is not meant to be a merchant account and its fees are significantly higher than most alternatives. Using Payoneer is more like an intermediary when making international transactions, but not necessarily a gateway that’s good for either party.

    Intuit QuickBooks Payments

    If you use QuickBooks, this is a great option. It has relatively low fees and you can expect great financial insight and invoicing features. However, this payment service doesn’t work with high-risk merchant services.

    Square

    In short, Square is great for in-person transactions with their card reader because it’s meant mostly for use as a POS. They do offer their services as an online payment gateway with comparable rates. But Square does not operate with merchants selling the products listed above.

    DirectPayNet

    DirectPayNet offers merchant accounts to high-risk merchants, so if your business deals with any of the products listed previously then this is a great option for you. It has competitive rates with features users expect, like accepting debit cards, credit card payments (Visa, MasterCard). But it also includes the features many merchants need, like adhering to legal regulations and compliance standards. It also helps to reduce chargebacks and offers fraud protection.

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