A merchant account can help relaunch your online store when payment processing is unexpectedly suspended. A stoppage from PayPal or Stripe is detrimental to e-commerce businesses. As popular payment solutions, there’s an innate sense of trust built into alternative payment providers. However, the ease of setting up an account is often too good to be true.
Companies around the world with high-risk business models are facing difficulties in routine e-commerce activities. When it’s time to upgrade from PayPal, DirectPayNet can help you resolve payment-processing challenges by securing approval for a merchant account.
Why do PayPal and Stripe suspend accounts?
Did you read through your payment processor’s list of prohibited and restricted merchant categories when setting up your online store? If not, you’re not alone. A survey from Deloitte found that 91% of consumers agree to terms and conditions without reading them. Though it should go without saying, we need a reminder of the importance of reading through online contracts before clicking “I Agree.”
There are grave consequences when a payment provider discovers that your business model is on their prohibited or restricted list. Your provider can suspend your account at any time. This move makes your business incapable of accepting payments and can even freeze the funds in your account.
Business categories considered high risk
Stripe’s definition of a high-risk business is lengthy. Financial coaching, travel reservation services, bongs and other smoking accessories, health supplements, adult entertainment and several more are taboo categories. PayPal’s list is comparable. Here are some prohibited and restricted categories.
Digital Products and Business Opportunities
- Intangible goods are more vulnerable to customer disputes than physical products thereby making ebooks, elearning, marketing service packages, and motivational speakers a high risk.
- The Forex market is often more volatile than other investments, because of high chargeback rates. Processors prefer to work with licensed providers and if your business is based out of Europe, all the better as it’s a friendlier market to forex trading.
- Supplements, vitamins, and loose herbs are at high risk for legal action due to the lack of government health regulations. It’s a grey area where acquiring banks and other payment providers don’t want to get entangled.
- Gambling, video games and fantasy sports fall under this category. PayPal is hesitant to work with these businesses due to US state regulations on gambling. Also, though not prohibited, merchants in this category still require pre-approval.
- Fulfillment of services like rentals, bookings and accommodations in this category are volatile. Not only are average ticket prices high, but also the possibility of a chargeback for a high amount is a worry for any payment processor.
Jewelry and Precious Metals (e.g., gold and silver)
- Due to the prices, sellers of high-ticket purchases like precious stones or metals require pre-approval. Payment processors don’t want to worry about the consumer requesting a chargeback and causing seller overdraft.
- 3rd party payment processors such as PayPal ban any NSFW content. Whether it be an adult toy store, digital adult content, cams or adult dating, it’s best to work with a reputable high-risk merchant provider such as DirectPayNet who understand your business thoroughly.
Though not a comprehensive list, you can see how processors are cautious when it comes to expensive items, regulated and non-regulated industries, and products that are open to disputes.
Why You Need a Merchant Account
If your e-commerce store offers any of the above unpopular products or services, you should consider a merchant account. Sales edging towards $25,000 a month or processing a high volume of transactions can capture negative attention from your payment provider. Don’t lose access to your money! If there is any confusion or review conducted on your PayPal or Stripe account, funds are typically frozen and can cripple your business.
The flexibility to accommodate recurring orders, high-ticket transactions and high volume is a significant benefit of a merchant account. If you haven’t done so already, download and save your monthly processing statements. You may lose access to this valuable tool that can help you obtain another payment solution if you get terminated. To get a merchant account approval, processing history may be required to show your business can generate revenue. Also, pay attention to your risk by ensuring refunds and chargebacks rates are low.
DirectPayNet has more than 10 years of experience resolving payment challenges for those in high-risk industries. We help companies grow their e-commerce stores thanks to our specialized expertise and knowledge.
Don’t spend another second worrying about how to process payments on your website! Get approved for your next merchant account today with DirectPayNet.