Category: STRIPE

FAQ Friday: Stripe Stops Processing Payments for Trump Campaign, Is My High-Risk Business Next?

In what has been a tumultuous few weeks in the US, there is a story developing that isn’t getting as much attention as it perhaps should.

In the midst of record coronavirus pandemic-related deaths, social media expulsions, and impeachment debates, not much reporting has been undertaken on Stripe’s actions. Their decision (which was later matched by fellow payment facilitator PayPal) to stop processing payments for the Trump campaign last week abruptly robbed the current White House resident of his ability to raise funds online.

Several clients have emailed us to ask whether Stripe can pull the plug on a company that fast and with very loose reasoning. The short answer is yes; they can. We’ll delve into that in a little more detail later on. But first, let’s recap the events of the past few weeks.

From Capitol Riots to Losing the Ability to Process Payments

Unless you’ve been living under a rock, you’ll have seen footage of protestors storming the US Capitol building last week. After many blamed the President for inciting pro-Trump rioters to challenge the electoral college results (which saw President-Elect Joe Biden come out on top), companies started to turn their back on him.

The most famous actions were those taken by Twitter, with the company permanently suspended Trump’s account. Then there was the high-profile temporary collapse of the Parler social media app, which was home to many Trump supporters, after leading vendors such as Amazon, Apple, and Microsoft all refused to host the app on their server infrastructure.

While these stories stole the headlines, not much was made of the Wall Street Journal report that revealed Stripe Inc. had ceased to process card payments for the Trump campaign’s website.

Just like that, Trump’s fundraising abilities were cut out from underneath his team.

Why Was Trump Banned By Stripe?

Stripe has form when it comes to banning companies that have links to violent actions. They ask users to agree that they won’t accept payments for high-risk merchants, including any business or organization that “engages in, encourages, promotes or celebrates unlawful violence or physical harm to persons or property,” according to its website.

They felt that in the wake of Biden’s victory and active investigations by lawmakers and the FBI alike, they didn’t need to wait until the new President’s inauguration to take action against Trump’s campaign.

One example of Stripe taking action was after a gunman killed 11 people in an attack on a Pittsburgh synagogue in 2018. Stripe cut off Gab.com, a right-wing social-media platform where the alleged shooter posted anti-Semitic messages.

While Gab itself didn’t partake in any violence nor sell any violent products are services, the incident sparked a precedent that meant the leader of the Republican party was likely to be dropped in the wake of last week’s riot.

While former Trump has been impeached for a second time and awaits a Senate trial, the technology company decided that they had seen enough and removed their services from Trump’s online businesses for”inciting violence.”

So what does this mean for other high-risk e-commerce merchants?

President Donald Trump’s Campaign Website Today, Your High-Risk e-Commerce Business Tomorrow?

Whether you agree with Stripe’s decision to revoke their payment processing services to President Trump and his team, the decision could have wider implications for those in high-risk verticals.

Emails have been flooding in this week from merchants in high-risk verticals such as supplements asking if Stripe can unilaterally decide to suspend payment processing. The answer is yes. Especially if you are breaking their terms of service in any way.

But the truth is that most of these merchants operate in a gray area. Sometimes they are approved for payments in technically restricted sectors and are hoping the company never realize. In other instances, high-risk merchants are getting dangerously close to chargeback and refund limits.

But there are many instances whereby legitimate businesses are blocked and/or banned seemingly without valid reasons. Just a cursory glance at Reddit uncovers dozens of Shopify store owners (for which Stripe provides the processing) being locked out of their accounts and receiving radio silence from Stripe customer support.

In another instance, one e-commerce store owner was banned for excessive refunds, which only occurred because a glitch in Stripe’s checkout forced customers to enter their payment details multiple times, resulting in 3-4 orders being processed per customer.

The point is that while your business might have nothing to do with the GOP or the Democrats, you could just as easily lose your ability to process credit card payments overnight. Whether you sell PPE for COVID or you own and operate an immunity supplement website, Stripe could turn off the tap overnight and freeze your pending funds for as long as 120 days.

So the real question isn’t about Trump or his alleged ties to violence here. It’s about Stripe’s power over your online payment processing.

Secure a High-Risk Merchant Account Today to Mitigate the Risks Associated with Stripe

We’ve said on many occasions that payment aggregators like Stripe are a ticking timebomb for your business. Yes, they are easy to set up and gain that initial traction for your store. However, their risk tolerance is incredibly low. One misstep could see the end of your processing.

That’s why you need to have a backup plan in place. Whether you’re based in New York or London, setting up a dedicated high-risk merchant account is the only way to mitigate the risk Stripe represents to your business.

With specialist high-risk payment solutions, you can work with acquiring banks and payment processors that understand the inherent risk associated with your industry. You can benefit from a more understanding approach to chargebacks and refunds while securing help in the battle against fraudulent payments.

To speak to one of our expert team members, shoot us an email to discuss your worries about losing your payment processing abilities for your high-risk business today!

January 15, 2021
Stripe Account Suspended? Here’s Why You Should Always Have a Back-Up Plan!

We’ve seen it so many times. On almost a weekly basis, we have clients emailing us desperate pleas such as “Help! My Stripe account was suspended! What Do I Do Now?!” Every day that passes sees another online business being flipped upside down by suddenly losing its payment processing abilities.

Click here to start accepting credit card payments again.

Startups worldwide benefit from the easy setup of Stripe, build their online businesses up to noteworthy five-figure-per-month revenues, and then BANG! They wake up one morning to find out that they can’t process payments. A successful business is brought to a grinding halt within just a few seconds without so much as an explanation.

Sound like a nightmare scenario to you? Well, sometimes it gets even worse! Sometimes you can have your company MATCH-listed too, making securing a new merchant account almost impossible.

But don’t worry, if you’re currently running what’s considered a high-risk business with Stripe processing your payments, you can act now to prevent yourself from sleepwalking into this potentially disastrous scenario.

We’ll walk you through what that back-up plan looks like. But first, let’s spell out the dangers associated with using Stripe as your sole payment processor for credit card payments.

Why Stripe Is a Dangerous Payment Service Provider For Merchants in High-Risk Verticals

So many online entrepreneurs get caught on the hop because they don’t see the suspension of their Stripe account coming. Let’s shed a little more light on what will land your business up the creek without a paddle.

Firstly, you must read the terms and conditions before you even sign up. Stripe do clearly state which business are restricted from receiving Stripe payment services. The issue is that your business might fall into one of these categories but initially slip through the net during their mostly-automated approval process. The last thing you want to do is build a business on borrowed time, so read the extensive exclusions list carefully to ensure that your vertical isn’t on it.

If you also dig into the terms and conditions a little closer, you’ll see that in “Section A,” Stripe reserves the right to suspend or freeze your account whenever they want. Regardless of whether or not you’re a high-risk merchant, this is a pretty frightening clause.

Worse, they don’t have to give any precise details about why they’ve done so. So often, they cite an unusual number of customer disputes, cancellations, chargebacks, or merely an “elevated risk” to their processing even if you’ve got a squeaky clean processing history!

Fortunately, having worked in the payments industry for over a decade, we’ve got a pretty good idea of what you need to watch out for to hang onto Stripe as a payment provider for as long as possible.

Keep a Watchful Eye on the Chargebacks Attributed to Your Stripe Account

Chargebacks are the biggest threat to payment aggregators, such as Stripe and PayPal. Their risk management policies are incredibly strict because they operate huge master merchant accounts. Each new business they onboard takes up a slot on that master merchant account, potentially posing a risk to its integrity.

This is where chargebacks come in. Not only are they incredibly damaging to the reputation of the top-level master merchant accounts, but they can cost Stripe a fortune. A single chargeback dispute process can cost as much as $25 to resolve. They pass most of that fee back onto you, the merchant. However, they still have to shoulder some of the costs.

For a global payment gateway company that processes 20-100 card transactions every second, this can soon add up to astronomical amounts if not strictly clamped down upon. At the highest number on that estimate, even if chargebacks only cost Stripe $5 each, they would incur $432,000 in chargeback fees each and every day at a chargeback ratio of 0.1%.

That’s why as soon as cardholders and card networks start issuing chargebacks to your account, you’re in big trouble. The entire Stripe business model depends on eliminating as many of them as possible.

So what’s acceptable? Ideally, none. But obviously, that’s not realistic. But if you’re over a 0.5% chargeback ratio, you should be very worried indeed. That meets the criteria they set in their terms and conditions to shut your account down within 24 hours, hold payouts destined for your bank account, and eliminate your cash flow.

If you’re well over, and more in the region of 0.9-1%, things can get really unpleasant for your e-commerce business.

Stop worrying about Stripe, click here to contact us today to get hassle-free payment processing solutions for your business.

Stripe Can MATCH-List Your Business

If you’re ever informed that your business has been added to a MATCH list, it’s time to panic. In case you’re unaware, Member Alert to Control High-Risk (MATCH) is a credit risk review system acquiring banks consult before considering issuing a merchant account. MATCH originated with MasterCard, but now all credit card companies are associated with this system. Sometimes it’s referred to as a Terminated Merchant File (TMF).

The issue with being on the list? You’re effectively blackballed as a company. You cannot process credit cards. Even additional payment methods are challenging to come by. New merchant accounts can only be secured on the harshest of pricing terms. Reddit is full of sob stories of business owners placed on the MATCH list, and it’s not somewhere you ever want to be as a company.

Here at DirectPayNet, we can help companies get off the MATCH list, but it’s tricky. There is never any guarantee of success. Sometimes that’s the end of the road. A successful and profitable e-commerce business comes crashing down in the space of a few hours.

The worst part is that it’s not always the fault of the business. With Stripe, it’s not uncommon for businesses to share MIDs with other merchants. You see, payment facilitators like Stripe allow any business with a master MID account to add companies as a sub-merchant.

However, an automated underwriting tool vets and approves applications for these types of accounts. Therefore, the chances of rogue merchants getting approved are much higher. And when those approved merchants wreak havoc on your shared account, you get tarred with the same brush.

Yes, that’s exactly how risky Stripe is. You could be MATCH-listed with a clean processing history. And yet, startups continue to rush over to Stripe in their thousands.

Has your business just been MATCH-listed? While it might feel like a time to panic, staying calm and acting quickly can help you recover. Read our step-by-step process to MATCH-list recovery here!

Stripe Accounts Can Be Suspended or Shut Down Without Warning

Perhaps the worst aspect of having your Stripe account shut down is that it comes without warning. There’s often just one simple email informing you of their decision and wishing you the best of luck.

When panicking business owners email customer support looking for answers, they rarely go back on their decision. They also don’t often give you any detailed information as to why you have been suspended or shut down.

Again, just a reminder, this could happen at any moment. It doesn’t matter if you have a clean processing record. As we’ve already mentioned, you can have your Stripe account suspended for the activities of others.

This is why you simply have to set up a back-up merchant account. That way, you can ensure you’re covered for every eventuality.

Always Source Your Own Merchant Account – Even if You Continue to Use Stripe

We get it. Stripe is one of the easiest and most convenient payment service providers out there. They handle the financial institutions processing on the back-end for you, take on PCI DSS compliance, supply you with advanced fraud prevention tools, and the ability to process payments in multiple currencies, including USD, EUR, and GBP.

We’re not saying don’t set up a Stripe account, period. We’re saying have a back-up plan ready for when it inevitably falls apart for you as a high-risk merchant. Putting all of your eggs in one basket is always risky, no matter what aspect of your business we’re talking about. But it’s even more vital for payments.

Losing access to payment processing can permanently damage your online business, sometimes beyond repair. With Stripe’s ultra-low risk tolerance, you are always going to be just one email away from trouble. If you’re in the dating, nutraceutical, weight loss, hair loss, dropshipping, or consumer electronics space, you’ll already know that chargebacks are part and parcel of doing business in these verticals.

The good news? There are payment processors that can provide specialist high-risk merchant accounts with higher built-in risk tolerances. They understand that chargebacks, refunds, and the occasional instance of fraud will happen and help you implement steps to mitigate the damage they do to your processing.

That’s why it’s a good business practice to divert a portion of your sales to a specialized high-risk merchant account (known as load balancing) to build up a solid processing history alongside your Stripe card transactions. This way, when the inevitable happens over at Stripe, you have a back-up plan in place ready to go. Failure to do so could see you lose your business overnight.

Speak to the High-Risk Payments Experts to Protect Your Online Business Today

The unfortunate truth is that many entrepreneurs approach us too late. There’s nothing we can do to help resurrect their payment processing. However, for the vast majority of clients who have their Stripe account suspended or shut down, there is a route back to processing credit cards and other alternative payment methods.

The sooner you approach us during your business journey, the better. Even if you haven’t yet launched your online high-risk business, we can still advise you of the best options for specialist payment processing.

If you’ve already had your account suspended by Stripe, PayPal, or anyone else, click here to contact the experts here at DirectPayNet immediately to assess your situation. More often than not, we can rectify your payments situation and ensure your business lives to fight another day!

January 4, 2021
Who’s Involved in Credit Card Processing?

In a simple world, your online sales would go from your website directly into your bank account. In reality, credit card payment processing involves a complex process involving different software and technology partners; these are required to ensure you can collect from the customer. Each technology partner presents its own challenges and potential for losses to occur if integration is not optimized.

Many e-commerce merchants are in the dark when it comes to API’s and credit card payments. Understanding the purpose of a payment gateway and how it can increase your conversions is imperative to your online store’s success.

Merchants in high-risk industries are especially sensitive to sales conversions. Traffic cost is increasing with more competitors entering the market. It’s important to use anti-fraud tools, reporting and other features in your payment gateway. Not doing so, can lead to chargebacks, unnecessary refunds and termination from your merchant account provider.

E-commerce has changed considerably in the wake of the pandemic. Brick and mortar stores are migrating to online-only environment, ditching their point of sale equipment for virtual payment gateways. Many entrepreneurs are setting up shops online to work from home. Many e-commerce business in the fitness, business opportunity and nutraceutical niches are doing quite well. Many newer merchants make mistakes that are detrimental to their business and can result in them being placed on MATCH or the Terminated Merchant File (TMF) for high chargebacks or customer data breaches.

Are you in the dark about the differences between payment gateways and merchant accounts? Perhaps you’re lost when it comes to how payment gateways work with shopping carts?

Well, here’s a guide to understanding the ins and outs of payment gateways, how they work, and how to use them to your advantage.

What is a payment gateway?

A payment gateway is a software that takes encrypted transactions from your checkout page and passed them onto your credit card processor. Think of this as a point of sale terminal in a physical store.

The core function of a payment gateway is to be a digital cash register for online transactions. And like a traditional cash register, a payment gateway encrypts customer credit card data and ensure you get a response if a transaction is approved.

Payment gateways will achieve this function through a few steps. First, the gateway will encrypt the customer’s card information. Once this is complete, an authorization request will be sent for the credit card processing. Once the payment processor gets a green light from the customer’s bank or credit company, the transaction response is sent back to the gateway which then reports it to you, the merchant. There are several other features merchants can use in the payment gateway, such as anti-fraud tools, CVV verification, AVS (address verification service), etc. These features help lower the risk of refunds, chargebacks and fraud.

All parties involved in payment processing charge a transaction fee

● PayPal. This payment option is trusted by customers and merchants alike. It’s one of the most well-known payment gateways and boasts over 277 million accounts. Transaction fees are subject to a 2.9% rate plus $0.30, which includes payment processing plus the gateway fee.

● Square. This platform is known for its physical smartphone card-swipers for small businesses. Square currently charges 2.75% for swiped transactions and a bundled 3.5%/$0.15 fee for online-only transactions.

● Stripe. Another popular option, Stripe focuses mainly on mobile shopping and platform payments. Stripe’s bundled fee is 2.9% plus $0.30 per card transaction.

These fees are for all cards, including debit cards. These payment solutions typically do not work with businesses that are classified as high-risk such as nutraceutical, adult entertainment, subscription products, business opportunities. We get several calls a week from merchants exclaiming: “Stripe has shut me down! What do I do to keep my business running?”

A word about Shopify

Some merchants integrate their checkout pages to PayPal, Square or Stripe directly. Others prefer to use Shopify. And, it’s important to note that Shopify is not a payment gateway and requires you to work with a payment solution they are integrated with. They have several they offer although it is important to check that your payment processor and gateway is included in Shopify.

Many high-risk merchants start by using PayPal or Stripe through Shopify only to later realize they cannot scale with these payment solutions. A high-risk merchant account offers more control over the checkout process and is more flexible with ecommerce businesses selling nutraceuticals or business opportunities.

Merchant accounts same as PayPal or Stripe allow you to process transactions. Although keep in mind, a merchant account needs to be connected to a stand alone payment gateway in order to allow you to accept credit card data.

Your merchant account provider will give you a VAR sheet, which includes technical details you can use to pop into a payment gateway. Popular payment gateways include authorize.net and NMI. These gateways will allow you to accept multiple payment methods in addition to Visa and Mastercard, such as American Express, Apple Pay and even ACH so long as your payment processor supports it.

If you’re working with Shopify which requires an external gateway service, you can use 3rd party plugins such as Spreedly that will allow you to connect several payment gateways without having to integrate complicated APIs.

More alternative options

If you’re a high-risk merchant, you know that Stripe or PayPal is not an option for accepting credit cards on your website. That’s why its important if you are working with them to start looking for payment processing services that can accommodate your high-risk industry.

Working with a partner like DirectPayNet can help you scale your nutraceutical, biz op or fitness store without the worry of being shut down or suspended. DirectPayNet offers multiple gateway options that can work with Shopify and various other shopping carts. PCI compliance and processing fees are top of mind for us so we ensure you have fair fees, a secure and encrypted environment for your customers’ information.

Shoot us a message today to apply for credit card processing. Our experts can help solve any tech issue you’re facing and get you up and running within a couple of hours.

What can you expect to pay?

There’s a common misconception that a high-risk merchant account with a separate payment gateway comes with exorbitant monthly fees and unreasonable pricing.

However, if you are a responsible merchant and use all the tools at your disposal to mitigate chargebacks and refunds, many options are cheaper or competitive with Stripe or Paypal.

Startups may have to pay higher fees while payment processors assess the risk of their business, although after 4-6 months of credit card processing, your merchant account provider can review and lower fees when your performance is reviewed. If your chargeback ratio remains low, transaction fees can be adjusted to your favour.

Most popular payment gateways charge via bundled rates. For example, Stripe charges 2.9% + $0.30, no matter the card type. With your merchant services provider, there could be a different fee for debit cards vs credit cards and even card type like Discover, American Express, etc. Just ensure to read the fine print to ensure there are no hidden fees.

If you work with DirectPayNet, we will ensure to walk you through all fees and make it as simple as possible for you to get started. Business owners have enough to worry about, contact the experts at DirectPayNet to take care of your payment processing.

Credit card processing the right way

Merchants should use payment gateways as more than a bridge between a shopping cart and merchant account. In fact, most offer additional bells and whistles. They also have several external integrations to allow you to plug in your accounting software or other nifty apps to maximize value and save time.

A few key features that many platforms will offer include:

● Fraud protection and anti-fraud tools

● Tokenization that protects payment IDs

● Various software integration options such as QuickBooks to save time on accounting

● Sophisticated data and transaction reporting tools

● Recurring payment management that is PCI-compliant

● Invoicing tools

● Hosted payment forms or a virtual terminal if you don’t have a shopping cart

● Transaction detail plugins that show errors, card types, BINs, and declined purchase reasoning

Your payment processors can help guide you to find the best solution for your ecommerce business. If you need help finding the tools to navigate your online store, trust the experts at DirectPayNet.

November 20, 2020
FAQ Fridays: How Can I Plug In My Own Payment Gateway To My Shopify Store?

I sell mainly immunity supplements on my Shopify store, but recently I added some upsells offering weight loss products.. I sell mostly straight sale but have optional continuity with a 10% discount for customers who sign up. I was scaling nicely and processed 55k in my first month due to my good media buys. One morning I woke up and my Stripe account powered by Shopify payments was disabled and my store was closed because customers could no longer checkout. I’m looking for a new payment gateway but I really want to avoid having to switch my store away from Shopify.

A: The most important thing is to get your Shopify Store up and running again so you don’t lose your customers. To get that done, reach out to a payment processor who works with merchants in high-risk industries.

To avoid long downtime, your first line of defence is to open a PayPal account and pop it on your Shopify checkout page. Getting a high-risk merchant account will ultimately be your best recourse although that can take a week to set up whereas with PayPal express you will be up and running in minutes.

Is PayPal a long term solution?

Similar to Shopify payments powered by Stripe, PayPal does not support nutraceutical merchants very well. If you’re doing forced or optional continuity, it makes it even harder to work with these payment processors.

It’s a good idea to have PayPal setup as a backup or to accommodate your international orders. Orders outside the US will convert better with PayPal as it offers local currency conversion and payment methods that appeal to various markets.

If you’re scaling substantially outside the US, your high-risk payment processor has solutions to help you convert better globally but if the volume is very low, it wouldn’t be worth the extra time and fees to put that solution in place if you can simply rely on PayPal.

If your sales volume is low (under 25k per month) and chargebacks stay in acceptable limits, PayPal typically will let you run your nutraceutical store even if its not an industry they happily support.

But for now, since your store has been shut by Shopify payments, PayPal can be plugged in quick allowing you the time to get your merchant account and third-party payment gateway in place so you can start scaling your business without worry.

Which Payment Gateways does Shopify Support?

Shopify has a direct integration to authorize.net which is supporting by many high-risk payment processors. This is a very simple and quick integration where you only have to enter a username and password and you’ll be ready to start accepting payments within the hour.

Some payment processors prefer to work with NMI and may even force you to use this payment gateway as they may have to input specific fraud settings for your business to ensure chargeback levels stay within acceptable limits.

If that’s the case, there are several 3rd party vendors that offer plug ins and ways to connect your Shopify checkout to NMI. One example is CartHook, it not only connects to your Shopify checkout page and allows you to plug into the NMI payment gateway but it also has additional neat features that can increase your conversions on subscriptions and upsells.

You don’t need an API for integration as this solution is already integrated into Shopify. A username and password will suffice to get started and accept payments using the NMI payment gateway.

What if I want to support alternative payment options?

If you want to add ACH as a payment option in addition to credit cards, you can apply with your payment processor to avoid an additional integration. If you want to use an external vendor for ACH, same as credit card payments, there are several 3rd party plugs in you can look into.

Although you were shut down by Shopify payments, you can still apply to Stripe for ACH processing. Adding the Plaid ACH solution to Stripe’s ACH will mean quicker approval times and payouts. The transaction fees for ACH are very low in comparison to credit card fees, so this should be a no brainer. As customers in the US are becoming credit strapped, offering ACH in your online store is becoming a must to increase your conversions and capture more sales.

Where do I go from here?

Now that you have your PayPal account up and running so your store Is not closed, its time to start looking into finding a payment provider for your online store.

Many payment solution providers such as DirectPayNet work with Shopify merchants to find a merchant account that understands the challenges faced by nutraceutical merchants.

Also, most payment processors can suggest third-party payment providers and payment gateways that work for Shopify merchants. Keep an open communication and don’t let integrations stop you from working with a payment provider that you feel comfortable with. As a Shopify store owner selling nutraceutical, you have limited options for payment processors, adding limitations because of complicated APIs isn’t necessary. Most payment gateways will be simple to setup through the Shopify admin panel.

Once you’ve got your credit card processing in place, don’t forget to think about adding ACH, Apple Pay, Amazon Pay and other alternative payment methods. Buying traffic is expensive so ensure to offer as many convenient ways to pay for your customers.

Offering currency conversion outside the United States to markets like Canada, Australia and the United Kingdom will improve the customer experience and your conversions outside the US. Make sure your fulfillment is able to expedite orders quickly to avoid chargebacks from foreign orders.

Working with a trusted advisor like DirectPayNet will guarantee your ecommerce website will thrive. Crafting a payment strategy to accommodate your scaling nutraceutical store is a must to avoid bottlenecks in your business. Contact us today to discuss credit card rates, shopify payment gateways and conversion optimization.

November 13, 2020
Is Adding an Immunity Nutraceutical Upsell to your PPE Store A Good Idea?
Selling PPE (personal protective equipment) and nutraceutical immunity boost supplements online might seem like a good idea since the pandemic started. Still, there have also been a lot more roadblocks than ever before.

Masks, gloves, face shields, antibodies, probiotics, lozenges, you name it…

CNN reports that protective equipment costs increase over 1,000% amid competition and surge in demand.

It’s no surprise that more consumers have been looking to get their hands on these items to strengthen their immune system and protect themselves from the coronavirus (especially during the flu season).

That’s why most e-commerce stores are pivoting to reach that demand when most people can’t get a hold of their healthcare provider fast enough.

And if you’re already selling PPE and immunity boost supplements…

Some say it could be the “21st-century gold rush,” while others say it’s been nothing but headaches.

Since many companies are focusing on selling what’s hot right now… 3rd party platforms like Shopify and Stripe are cracking down on their wellness regulations.

Whether you sell on Shopify, Amazon, or elsewhere, merchants could quickly get banned if they don’t follow over-the-counter guidelines for selling COVID-19 related products.

Not only that but if you’re not diversifying your payment processors, that could be another way you’re losing out on some serious sales.

To find out if your online products are set to come out profitable, read on to discover why your payment processor actually has a lot to do with your overall revenue.

5 ways to avoid e-commerce platforms from banning you

As we mentioned earlier, 3rd party e-commerce platforms like Shopify and Amazon are cracking down on merchants selling PPE, immunity boost supplements, and other antiviral properties.

And the worst part is that you may not be aware of these new rules for selling these products. That means you may experience your products being removed, your store suspended or even your merchant account terminated.

Since consumers are staying at home and looking to buy more immunity-boosting or dietary nutraceutical supplements online, it’s undeniable that sales have gone up. According to ShipBob, vitamin and supplement purchases are growing 12% faster than the overall e-commerce average.

So if your products fall under the immune-boosting supplement category, you need to make sure you do whatever it takes not to get banned.

Let’s take a look at 5 of Shopify’s rules of engagement, for example. Here’s what you should look out for if you’re planning to sell any COVID‑19 related products:

1. Claims

If your products include any medical or scientific claims about a balanced diet, a healthy immune system, or even getting enough sleep, you must be able to back it up with evidence. Also, claims about preventing, treating, or curing COVID-19 aren’t allowed and will be removed from the platform.

2. Compliance

You’re required to comply with any laws and regulations of not only COVID‑19 related products but also any sort of powerful antioxidant, a multivitamin, or immune booster that supposedly helps improve a healthy lifestyle.

3. Licensing

Before you sell any of your immunity health products, you must first acquire all the appropriate licenses and permissions. This also includes any other approvals and authorizations for selling medical or health-related products.

4. Price gouging

You’re not allowed to increase your prices or overcharge customers for selling PPE and COVID‑19 related products like masks, face shields, hand sanitizers, and more.

5. Selling regulated products

You must first notify and get approved by Shopify about the sale of any regulated products. Again, you have to prepare evidence such as documentation to confirm that you’re in compliance with the rules and sign any additional agreement if required.

The reason why you’re considered a high-risk merchant for payment processors

Not only do you need to know the rules of 3rd party e-commerce platforms, but the same applies to payment processors too.

So even if you’ve gotten away with listing your products on Shopify or Amazon, there’s still a chance you won’t get the sales you were expecting because of your payment processor.

And if you’re relying too much on Stripe or PayPal, it might be time for you to reconsider. You need to know how to become bulletproof from the payment processor holds.

Because if you want to come out successful selling PPE or immunity boost supplements, then you’ll need to diversify your options and work with payment gateways who already have a history working with supplement merchants.

If you’re selling nutraceutical supplements, you’re immediately at a higher risk of getting your transactions declined.

Whether you’re selling something that may seem as simple as vitamin a, vitamin c, vitamin d, vitamin e, or even calcium supplements…

Most payment processors don’t favour these because they usually bring increases in chargeback activity. As Credit Card Insider says, “Credit cards are often flagged automatically when used in a way that suggests the charges might be fraudulent.” And when this happens, usually you’ll take the fall even when your chargebacks remain acceptable.

You also have to keep in mind that high-risk sales come with a lot of chargebacks too. So you’ll lose your money, and you could lose your business overnight.

For PayPal, they can hold your funds for up to 180 days. And for Stripe or Square, they could hold it for even longer (and it’s not guaranteed you’ll ever receive it).

Imagine if you sold tens and thousands of dollars of your products, and you couldn’t keep any of the funds… that would be a total nightmare, wouldn’t it?

You could run out of cash flow and eventually close down for good. Because if Stripe, Square or PayPal stops taking your payments, then you’ll have no chance at scaling and growing your business.

Do you want to know what’s worse?

Let’s say you were charged with fraud because of a questionable claim on your website, and the next thing you know, you get hit with a lawsuit. That could either bankrupt you, put you behind bars, or both.

Because the FDA guidelines pay close attention to any immune system support products that are scaling, they will still target you even if you are considered compliant. So it’s best if you stay on the safe side by getting approved and familiarizing yourself with good practices.

Again, choosing a payment processor that already has a history of working with supplement merchants before is your safest bet.

If you want the optimal solution to beating high risks and earning high rewards instead, feel free to reach out to the team at DirectPayNet, and they’ll make sure your business is safe from selling COVID-19 related products.

3 key steps to finding the right merchant services for your products

Suppose you want to feel confident about selling PPE and immunity boost nutra supplements without worrying about your merchant account… in that case, there’s no better solution than to find the right payment processor for you.

Having the right payment processor will not only prevent you from losing tons of revenue down the road, but you’ll also create a better customer experience, and that could encourage positive word of mouth for your business.

Here are 3 key steps you could take to ensure a massive increase in your transaction rates:

1. Never rely on just one source

We mentioned briefly about diversifying your options earlier, and this is an important lesson to follow throughout your business. Because when you rely on just one source, you’re risking a chunk of your business if something happens to that source.

So it’s always smart to set yourself up for success by having a backup plan. And if you’re not prepared, it could disrupt all of your business’s operations.

With payment processors, it’s never good to have just one source. What will happen if your processor no longer supports businesses that sell nutraceuticals or PPE? Where will you turn to? How much longer will you have to close your traffic sources and ads until you find another source?

You see, no one would want these types of issues to occur. So it’s better to be prepared and have other options you can quickly bounce back from.

Even if you think you’re selling some basic products, it’s never promised that your merchant account won’t get banned. Because guidelines are continually changing, you never know what the next update will be about.

For example, face masks may seem simple enough to sell, and it was never a problem before. But SocialMediaToday shares that Facebook had a temporary ban on ads selling medical masks to prevent people from taking advantage of the pandemic for financial gain.

So if you were relying on Facebook ads to bring in most of your sales, you could’ve been deeply affected by this. But if you had other options, you could focus more on those and continue to scale.

And if you want to choose a payment processor that has a bigger appetite for high-risk businesses, you’ll need to be as transparent as possible when filling out the applications. That way, you’ll know right from the start if you’re a good fit.

2. Be as transparent as possible

In an article from NutraIngredients-Asia, several science researchers have communicated their key findings in immune-boosting health supplements. Since more companies are looking to sell them ever since the coronavirus outbreak, it’s their responsibility to confirm their research and educate consumers.

When it comes to this industry, you need to be transparent about what you’re selling. That means being truthful about all the micronutrients and minerals involved with supporting your immune function, immune cells, and white blood cells.

And because vitamin c supplements and vitamin d supplements have increased sales throughout the pandemic, it’s good to emphasize the recommended limit for consumers to take even though some might want to feel extra protected from the coronavirus by taking more.

These are just a few examples of how you can be transparent to your consumers. You’ll need to communicate clearly about what they’re getting, or you’ll run into trouble if they think you’re selling them something else.

Pure Branding states that 1 in 5 of U.S. consumers will choose a transparent vitamin and supplement brand as their first choice.

Because the last thing you want is refunds, chargebacks, and disputes – those are all greater costs that can affect your merchant account and business. So aim for transparency, and you’ll avoid dealing with complaints.

3. Use these tools to protect you

As the e-commerce world is evolving, more tools become accessible to help nutraceutical merchants protect their businesses.

So if you want to make sure your business is moving in the right direction, you’ll need the right tools and technology to protect data such as customer information.

When you do this, you will avoid issues with fraud, lower chargeback rates, and make sure that your client information isn’t mishandled. Keep in mind; we always want to manage a good relationship with all our customers.

So when you’re looking for a payment processor, look out for tools that can better support you and the customers’ payment experience.

Here are some tools we recommend for your payment processing:
- An e-commerce website where you verify transactions through the 3D secure protocol that can chargeback proof your sales.
- An anti-fraud scoring software that helps you limit orders to specific markets that are likely to deliver your products later than expected.
- The ability to track packages and provide updates to your customers so they don’t feel misled about expected delivery times.
What to look out for if you’re starting this business

If you’re entirely new to selling PPE and immunity boost supplements, the first step you should know is to learn about all the risks and see if you’ll comply with all the laws and regulations.

According to Supplements 101, 46% of consumers are concerned about the effectiveness of supplements. That’s almost half of all consumers! And 92% of them will actually read the label.

This just shows how important it is to do your research and be truthful about all your products. Because the more transparent you can be, the more consumers will be confident in buying your products. And on top of that, you’ll get to skip out on all the headaches when it comes to complaints and chargebacks.

So the best marketing practice is to scrutinize how you deliver your message to your consumers (especially if you’re selling COVID-19 related products). You don’t want anyone to feel skeptical one bit.

Once you have this down, then you’ll need to find the right payment processor to ensure you’ll come out as a profitable merchant who customers would love to buy from again and again.

Set yourself up for success with a merchant account

We know that selling personal protective equipment and nutraceutical immunity boost supplements isn’t easy… but it’s also the hottest thing in the market right now, ever since the pandemic started.

With all these new rules making supplement merchants scared to scale, it’s no wonder why more people are afraid of getting their accounts banned.

To ensure you’ve set yourself up for success, you’ll need to let the payment processor handle what’s important to you – your revenue. But not just any payment processor…

You’ll need to find those with an appetite for high-risk businesses and experience working with this industry. So Stripe and PayPal may not be your best pick since they’ve had a history of banning supplement companies before.

There aren’t too many payment processors that’ll favour nutraceutical merchants, but those that exist understand the industry and will help your business scale.

Even if you’re already selling from Shopify, Amazon, or another 3rd party platform, the right payment processor can increase your transaction rates and give your customers a better shopping experience.

If you’re looking for a payment processor that can give you just that, you can contact DirectPayNet today, and they’ll help you set up for success.
November 12, 2020