Tag: merchant account

A Payment Gateway Can Unleash Independence For Amazon Sellers
Amazon sellers, if there was ever a time to own a dedicated e-commerce setup and get a payment gateway and merchant account for your business, it is now. More brick and mortar stores have been moving to Amazon to sell their products, because of social distancing and stay at home orders. This seems like the easiest route to getting started in e-commerce. And you may already be using this platform to run an online store, which means you now have increased competition.

For some merchants this pandemic has shown that relying on third-party platforms to sell your products can have serious pitfalls. You’re not the one calling the shots. You will be at the mercy of whatever decisions these platforms make in their best interest. You’re losing 10-40% of your sales revenue before you see any money!

This is one of the reasons why we advocate that businesses should have their own merchant account, especially if they want to scale. So, let’s take a quick look at the advantages and disadvantages of selling through a third-party seller versus managing your own sales with a dedicated merchant account.

The problems with selling through a platform like Amazon

The competition on Amazon is brutal. How can you guarantee that your products will show on the second page of search results much less first with millions of other sellers? Are you going to pay to play with sponsored posts? Hope that Amazon selects your brand as their preferred item?

Now, coupled with the coronavirus, this is a constantly changing landscape on Amazon to which you have no control. If, for example, you used to rely on affiliates to sell your products via Amazon, how would their affiliate commissions affect your business? Not sure what we speak of? Well, since the pandemic, there’s been a reduction in affiliate payouts. That removes incentives to potential new affiliates.

But – there’s more.

Amazon took the decision in March to prioritize shipments of essential goods during the outbreak. That means, if your products were not classified as essential, you would have been affected. Stores with non-essential products would be in limbo until Amazon decides to reopen to allow shipments to and from its warehouses under the Fulfilment by Amazon (FBA) program. This decision affected millions of third-party sellers, just like you. Just like you, they lost significant revenues because they weren’t in charge of their own operations.

There are also:
- restrictions on product pricing;
- lower profits; and
- inability to trade high-risk products
Now, imagine having more control over sales and decisions about stocking, selling, and shipping items. Or that you had another option that was primary or even supplemental to selling on a third-party e-commerce website? That’s the type of freedom having a dedicated merchant account brings to the business table.
The fact that you’re selling via an online platform shows that you know the power of e-commerce. Now, with the effects of the coronavirus it shows even more why you should have control of that process.

The e-commerce surge spurred by COVID-19 will continue post-pandemic. Do you have a payment gateway and merchant account to take advantage of it? If not, contact our reps to get started.

Payments via Amazon and Google Merchant Center vs. an independent merchant account

Amazon payments – minus associated fees – get tracked and paid out every two weeks. These associated fees can range from commissions, monthly fees, storage fees, product refunds. You can get an idea of some of the seller fees here.

Waiting two weeks (unless Amazon holds payments as a precautionary measure) to access a payout is one thing. You still need to account for how long it takes your bank to process the payment. Depending on the bank, it could be up to five days. That’s a minimum of 15 days before funds are accessible.

Google Merchant Center is not quite like Amazon. The Merchant Center is more of an advertising tool. It allows you to plug in all your products, pricing and inventory from the online store on your own website. It makes it easier for potential buyers to buy within their search results on the search engine.

According to Google, “disbursements for individual orders may take at least 14 days after order shipment”. Now, the free advertising that Google opened up for sellers may be enticing. But focus on the overall picture, especially the fact that decisions can be as quickly reversed as they are made.

Other things to consider is what is the percentage of captured cross border orders.

How things differ with a merchant account

With a merchant account, there is quicker access to revenue from one day or up to seven days at most. Plus, your merchant account is directly tied to your business bank account for direct payments. You also have the ability to:
- increase sales and revenues and pocket more of your earnings;
- accept a variety of payment methods (e.g. debit or credit cards, e-checks, ACH payment);
- access offshore solutions to expand into new markets;
- accept payments in multiple currencies; and
- manage your money better, because you have direct access to your sales and market data.
So, ready to make the leap to independence?

Here’s what you need for a merchant account

There are a few requirement for merchant account approval, especially if in a high-risk business category. We’ve outlined the major ones below. It may seem like a long and overwhelming list. But as a current seller, you should already or be able to quickly meet these expectations. And, if you work with a payment processor like DirectPayNet, we can help you navigate through all requirements and sail through your merchant account application.

A Secure and compliant website

It’s not as hard as it seems to establish your own e-commerce presence on the web. There are several website hosting companies and multiple website platforms to get your site up and running in no time.
The main issue is to ensure that your site is PCI DSS compliant. PCI compliance includes:
- Having a secure website with HTTPS
- Secure, encrypted checkout process
- Up to date anti-virus software
- Clear shipping and returns policies
- Having visible contact information
- Frequent security systems and processes test
Products should be clearly displayed and described. It’s ideal to not sell items likely to get stuck in a supply chain delay (from China, for instance). You can meet order fulfillment requirements that are a part of the valuation process.

This post on website compliance goes into more detail on some of the other requirements.

A business bank account

You may already have this, but if not, get a business bank account to secure a merchant account. No negative balances are allowed. The bigger balance you have, the better. Personal checking or savings accounts are not part of the application process. Bank statements are though, so make sure your company’s account and history of transactions are in good order.

Good credit history

Credit history is affected by every aspect of a financial life. A good credit history is key for any merchant account application. That goes for the owner of the business or an appointed director. If your business is new, your personal credit history will be one of the most important items to consider.

A good business history

Amazon kicked out many sellers for abusing and taking advantage of buyers during the pandemic. This type of business practice affects merchant account applications too. Involvement in price gouging is a significant strike against getting approved. Aside from being cruel, acquirers will consider this when they look at the reputational risk of your company.

Underwriters look at online reputation (positive or negative). They can get this from review sites like Better Business Bureau (BBB). Large numbers of bad reviews on sites like BBB or similar are a major hurdle to merchant account approval. Clean up your online reputation and answer all customer reviews.

A dedicated merchant account and payment gateway makes sense

COVID-19 has changed many things. But one highlight is the immense benefit of a dedicated payment gateway and merchant account for payment processing. As an Amazon seller, there are serious limitations. The decisions you can make for your business, and the potential for growth as you expand, even beyond borders, is not wholly in your hands. Plus, it works out better for you to be independent.

Were you one of the many sellers who only had an Amazon presence? If so, you got burnt with the restrictions on non-essential items over the last few months. You certainly know the pains and the loss of income.

But more importantly – you get a bigger chunk of your revenues. You have fewer seller fees to pay over to Amazon. You won’t need to wait two weeks or more to access your payment. Plus, you have access to all your stats and sales data so you can make strategic business decisions.

With your own payment gateway, you have options and control. So, yes, having your own e-commerce website and gateway will require a lot more work. But the rewards are oh so worth it.

Expert guidance will also make the payment processing application process much smoother. So, contact DirectPayNet today. Let us help you be independent with your own payment gateway and merchant account.
June 16, 2020
Selling PPE & Got Banned? Get A Merchant Account
What did Shopify do that sent thousands of e-commerce store owners scrambling to find a merchant account for their business? Hint – it had to do with the coronavirus and businesses pivoting or transitioning into supplying safety-related products.

So, were you a Shopify seller of personal protective equipment (PPE)? Or, were you selling other high-demand products driven by the coronavirus? Then you would already know what we are talking about. Or are you an e-commerce business owner looking to now expand? And you realize the problems of continuing to use payment aggregators like Stripe and PayPal? (Perhaps you were even blocked by them for selling PPE and other gear.) Then read carefully.

A few – well many – bad apples and all had to suffer

Remember when the Coronavirus reached America and Americans went on a frenzied buying streak? Where they grabbed up every toilet paper, hand sanitizer, and wipes in sight? Well, we are sure that you also may recall the shortages and price gouging that followed.

Companies like Amazon that facilitated these types of businesses had to put immediate restrictions and limitations in place. The main aim was to avoid merchants misleading and overcharging consumers. So, thousands of Amazon sellers either lost their accounts or had them suspended.

Almost overnight, the sale of PPE such as masks, gloves, vizors and sanitization items became a high-risk industry. One avoided at almost all costs by regular merchant services providers, payment providers, and e-commerce platforms like Amazon and Shopify. It all stemmed from a rise in demand and some savvy business owners listening to the demands of their customers.

Businesses strategically pivoting for growth – and demand

Masks (N95 masks, reusable, and disposable). Hand sanitizers. Gloves. Other medical equipment like temperature monitors. These all became big-ticket items almost overnight. Businesses that were seeing a downturn due to social distancing and closure measures strategically switched to offering these and other items as consumer demands grew.

For some businesses, it was easy to pivot. Merchants who previously sold related items were (and still are) switching their business model to accommodate new consumer demands and to capitalize on this trend. For example, clothing companies moved into making surgical masks and other face masks for both private and medical use. Alcohol manufacturers quickly transitioned to making hand sanitizers. Plastic bag companies naturally switched to producing gloves.

Many small and medium-sized enterprises rushed into the e-commerce space to fill the gap in supplies for COVID-19 related products. And many of them went to commerce platforms like Shopify and Amazon.

But Shopify said not so fast. And they put in place stringent requirements related to the sale of COVID-19 products. This resulted in the expulsion and closure of over 5000 online sellers within a one-month period. Similar situations happened with Amazon and Stripe. They, too, implemented strict measures to manage sellers of PPE and other related items.

The restrictions and limitations imposed by these companies and their competitors apply equally to all merchants selling COVID-related products. This means that even as a legitimate business, you will find it difficult to scale if you rely on these platforms.

Companies that already had their own e-commerce websites particularly in the clothing or safety industry and merchant accounts fared better in the aftermath. Those that relied solely on third-party commerce platforms suffered.

If you were one of the thousands of sellers affected, DirectPayNet can guide you to finding a merchant account to continue growing your business.

So, what can you do?

Merchant accounts are lifesavers for sellers of COVID-19-related products

A rise in demand for merchant accounts is being driven by the business demands of COVID. A few bad apples at the crux of the pandemic caused severe repercussions for almost all sellers on these platforms. This led to online payment aggregators disallowing certain products being sold via their platforms. Plus, with his vertical being deemed too risky, other payment processing options became necessary.

And that’s where having a payment expert on your team can help. This isn’t just about your own merchant account(s). It’s also about being guided on matters of compliance so you do not lose your entire business. COVID-19 has been pushing more online sellers to get their own merchant account, even if your business still uses Stripe or PayPal. It’s important to have a backup. Third-party processors (such as Stripe) terminate accounts swiftly. You could be left without payment processing capabilities for weeks until you get a new solution.

Now, we’re not going to say that a merchant account will solve all your payment woes. But having one that aligns with your brand and products makes it much easier to scale upward.

Follow the many recommendations on the DirectPayNet blog when preparing to apply for a merchant account. Doing so can significantly increase your chances of success. We also recommend that you understand the card company rules like this set coming up for June 2020 by Visa. And as an e-commerce merchant during COVID-19, make sure you’re following these 7 online strategies to grow your business.

Critical lessons for maintaining your merchant account while growing your business

As you prepare to take on the e-commerce space in a more structured manner, we want you to have the best chance of success. Here are a few pointers to keep your customers happy and improve your chances of being approved for a merchant account. If you already have an account, following them will ensure you stay on good terms with your merchant services provider.

Do you have any questions about how these recommendations can be implemented or how they can affect your business or merchant account? Please feel free to contact DirectPayNet and speak with one of our knowledgeable business representatives.

Don’t put all your eggs in one basket

Unlike what the Shopify sellers did, don’t rely on one source of processing for payments. For example, a quick or unusual uptick in your sales can cause your business to be flagged and lead to dire consequences.

This small business owner found out the hard way after they started selling plastic face masks and sales skyrocketed. Their merchant account provider froze payments indicating that they were not selling their usual products. (They were a printing company that naturally had plastic in stock). They were able to get it sorted later. But not before having to open two other merchant accounts to continue selling.

The lessons here?
- Be truthful when filling in payment processing applications.
- Notify your merchant account provider(s) of material changes to your business operation.
- Have a back-up plan.
- Choose your merchant account providers wisely. If they do not have an appetite for high risk businesses, and you operate in that type of industry, consider getting a new one.
- Diversify and complement your checkout with additional payment options like ACH or e-checks.
Manage your supply chain

Manufactured products relying on a global supply chain often require a “just in time” supply process. We are in a global pandemic with limitations on movement and travel. Plus, every country is facing increased demands for raw materials or the finished products. This situation can be difficult to navigate when it comes to having a reliable supply chain.
So, in applying for a merchant account to facilitate the growth in this area of your business, make sure you have a solid supply chain. Inability to supply your orders within the time agreed with your buyers can lead to trouble. Issues like double refunds, chargebacks and the cost of disputing them creates problems within merchant accounts.

The lessons here?
- Have as air-tight a supply chain process as possible so you can meet your order fulfillment requirements.
- Ensure your promoted delivery times are in keeping with what you can actually meet.
- Maintain communication with your customers. This reduces impatience and possible chargebacks to your account.
- Manage disgruntled customers and limit online complaints as much as possible. A negative Better Business Bureau rating can cost you your account. Or prevent you from accessing other merchant accounts in the future.
Streamline your order fulfillment process

A criterion that merchant services providers evaluate is a business’ supply chain. And their order fulfillment process. Your ability to receive shipments of materials or getting the finished product to the consumer is a key factor in assessing your business. But it’s also a critical aspect of keeping your customers satisfied. A happy customer is less likely to request a chargeback.

You’ve seen the issues with delayed deliveries as Amazon prioritized what they deemed necessities. Merchants would have suffered with customers canceling orders because of the length of the delivery time. You have to take this example and ensure you don’t repeat it with your e-commerce online store. In doing so, you’ll protect not only your brand, but also your merchant account.

The lessons here:
- Provide clear shipping times, shipping guidelines, and refund policies on your website
- Provide customers with tracking information so they can maintain their own updates on their packages
- Ensure your customers have easy access to contact information and how to get in touch with you about their order
Technology is your business best friend

Keep your best friends close to get your business moving in the right direction. In the e-commerce world, it’s about the tech and tools at your disposal to protect your business and customers’ information.
This will limit issues of fraud, lower chargeback rates, and protect client information from theft or mishandling. You also want to manage your customer relationship well.

The lessons here:
- Start with a 3D-secure (3DS) e-commerce website. This allows you to keep your customer payment transactions encrypted and protected.
- Use anti-fraud software to restrict or limit orders to certain markets that require a much longer delivery period. This reduces the likelihood of chargebacks, because the products took too long to get to their destination.
- Track packages out for delivery and provide regular updates to your customer. You want to keep customers from getting impatient. Or, limit their need to initiate a chargeback because they feel like they were misled about receiving the product.
Accessing the right merchant accounts

As the incidents with Shopify and Amazon shows, you can’t build your business on third-party platforms without repercussions. Especially if you decide to transition to what they – and the card companies – deem to be high-risk verticals.

Selling protective gear, sanitizers, masks, etc., is, in effect, a very volatile market. And traditional merchant accounts and payment aggregators avoid high-risk businesses at all costs.

Are you willing to do what it takes to maintain a solid, reliable business model? Then let’s talk about getting the right kind of merchant processing to grow your business.
June 6, 2020
Prepper & Survival Gear Merchants: Now Is The Time For Your Business
Prepper and survival gear merchants around the world have seen higher sales due to fears and uncertainty amid the Coronavirus pandemic. With the major economic fallout around the world, people are in survival mode. Some are considering Bitcoin and other cryptocurrencies like never before. For others, they’re weary of relying on public services. They have a desire to become more independent of society. As such, sellers of survivalist gear, equipment, tools and guides are attracting more interest in their products.

Merchant accounts for survival gear merchants are more in demand due to the pandemic. Survival enthusiasts once ruled the market for generators, face masks, purification tablets and guns. Now, some of these products have become mainstream. In turn, online sellers are seeing more checkout activity.

Do you sell sleeping bags? Bulk dry goods? Something more high-risk, like handguns? Do you need to increase your transaction or monthly account limits in your merchant account? If you said “yes” to any of those, this blog will help you manage your current operations and scale your business during these uncertain times.

Some survival gear merchants experiencing major demand from average consumers

COVID-19 has impacted the very fabric of our civilization. Many businesses are closed. Nonessential workers are now working from home, or they’ve been laid off completely. Workers are fearful. Families are sheltering in place. The future of the country feels like it’s up in the air.

Those factors are bad news for many companies. However, for businesses selling prepper gear, camping equipment, and survival supplies, business is booming in states like Colorado. A merchant account with the right payment processing partner can help you take advantage of the incredible demand for what you’re selling.

Once upon a time, these supplies were for wilderness survival, end-of-days preparations, and the like. However, more and more average Americans are finding they not only want these items but have a serious need for them. Many everyday Americans are stocking up on emergency essentials to avoid potential quarantine fallouts.

Understanding the items in demand

A broad range of items and equipment falls into this category, including personal and family protection items like guns and pepper spray. However, it also involves things like water purification tablets, generators, solar chargers, rope, tents, sleeping bags, and just about anything else that might be useful or help you stay alive in the event of total societal breakdown. But what’s actually in demand?

An article in Forbes probes into the online search and buying habits of Americans during the COVID-19 pandemic. It highlights other items that people are searching for and purchasing, such as disinfectant, face masks, packaged food, bulk dry goods, and more. Other items include seeds for planting their own gardens and water purification systems. Camping-related products like tents, camp stoves, water jugs, fire starter kits, and camp cookware are also rising.

The full list is expansive and includes everything from rope to rifles, handguns to hammocks, tents to tripods. In short, if it can be used to help a family survive in the collapse of society or a prolonged period without access to power and running water, it is in demand right now.

Building on Your Advantage

US business owners cannot afford to overlook this key time in the market. What is that, though? Simply put, you offer products and equipment that are now in demand by mainstream buyers. The pool of potential customers is much broader for survival gear merchants. However, in order to reach those buyers, you need to change marketing techniques. What methods might you choose to explore? Actually, you’ll discover a broad range of options, including the following:
- Low-risk products sold on a separate website with its own merchant account for processing.
- A microsite for handguns and other more high-risk products aimed at more future-conscious customers.
- Adding video tutorials to product pages for novice customers.
- Creating and providing buying guides or product comparisons to help buyers unfamiliar with survivalist and prepper gear make informed buying decisions.
- Engaging in social media marketing through both paid ads and organic posts aimed at informing and educating those new to survivalist thinking.
The legality of survival items selling online

Concerned that selling survivalist gear online isn’t legal? Well, most of these are.

Survival gear merchants have a wide array of products and services to offer on the internet. Take small handguns for instance. In certain case, they can be sold online. But, the law requires background checks be conducted prior to a completed sale. So trying to go through the process of applying for credit card processing is tough. It’s best to secure a merchant account for survivalist products and services by partnering with a merchant service provider. They can find an acquiring bank that understands the unique regulations and compliance for merchants in the preppers and survivalist market.

Beyond Survival Equipment

Think that you have to sell physical equipment or supplies to be part of this industry? That’s not the case. You could sell a survival guide e-book, a series of guides, and other informational products through your website quite easily. Digital information products are hot right now. Yahoo! Finance reports that sales of digital goods have increased by 15% on average during the COVID-19 pandemic.

Selling Firearms

As we mentioned earlier, firearms can be legally sold online. However, conducting all background checks are a must. The law also requires you to ship the gun to a licensed dealer with a Federal Firearms License and not to the consumer. It’s important to understand that some payment processing companies will not work with online gun sellers. Some prefer to deal only with those who operate out of a brick and mortar location (no online sales).

Why is this? You’ll find many reasons why some companies hesitate to work with firearms sellers. Industry regulations, potential new regulations, high chargeback rates, and fraudulent sales, the high price point of products, general liability, and the sometimes sinister reputations of the firearms industry are just a few reasons some companies will deny a high-risk merchant account. Regulations differ from state to state. So, selling online is another issue vendors must consider when operating e-commerce businesses in this particular category. However, it is possible to beat those hurdles.

Things to Consider

Setting up a merchant account with the right payment processing partner can allow you to take advantage of the incredible demand for survivalist supplies. However, you need to consider a few things.
- How will you accept credit cards?
First, you need to think about the payment processor you use. Many survivalist products are prohibited. So, using Stripe or PayPal is not be possible. You may get an initial approval to process with them, but then your account may be terminated for violating their terms of service.

Survivalist merchants must diversify their payment channels. Having a relationship with more than one acquiring bank or processor eases risk appetite and gives you confidence to scale your online prepper business. This is especially considering the difficulty in obtaining processing for survival supplies.
- High-risk merchant accounts are far superior
It’s always best to get a high-risk merchant account, rather than use a low-risk, third-party platform. Merchant account services cater to unique vendors regardless of whether you’re selling a digital product on how to use a particular handgun, custom knives, or generators for conventional or tiny homes.

Working with inexperienced payment processors that have no knowledge of your business can lead to losing your merchant account. Little expertise in the industry could result in badly managed accounts and penalties. Of course, the worst punishment is a TMF or MATCH listing if your are caught selling prohibited products.
- Delivery must be fast
Another consideration for survival gear merchants is the inevitable delay in online ordering involves. Do your buyers expect very fast shipping times? If you cannot deliver on those expectations, you may face a high rate of chargebacks. Offer a tracking number so your customers can see where their product is, even if you have to charge an extra fee.
- Get the right supplier
The country of origin is another consideration. China is a major supplier and manufacturer of survivalist products. Will they reach your customers in a reasonable amount of time? Remember that COVID-19 has placed an immense amount of pressure on the supply chain and delivery times are significantly longer than during normal times. That said, there are signs of a recovery.

Start securing credit card processing for your unique survivalist offer

In the end, a merchant account with a forward-thinking payment processing partner can allow prepper and survivalist merchants to enhance their income. You can cater to the incredible demand spurred by COVID-19. However, not all merchant service and payment providers are up to the task. In addition to choosing the right partner that can accommodate your online prepper store, think about things like shipping and delivery times, country of origin, and even your ability to conduct background checks if you choose to sell firearms.

Our team can help you land a merchant account. A channel like this will grow your profits without the risks associated with third-party payment processors who don’t understand your niche. Or, block your business. Scale during this boom in the survivalist industry without worries.

Contact DirectPayNet, a payment processor that understands survivalist and prepper merchants and businesses.
May 23, 2020
Esports & Other Gaming Merchants Are Winning Amid COVID-19 Crisis

Online gaming merchants are keeping those stuck within the confines of their homes entertained as lockdowns are extended across the globe. In the space of a month online gaming platforms have experienced record growth. This is particularly the case for countries with strict quarantine measures.

India had a lockdown in place for over a month. A leading provider there, Patym First Games, reported a 200 percent increase in its user base in just one month. They are just one of many online merchants that have seen their membership and revenues soar.

Not only does this time present an opportunity for esports companies though. Online sports betting, video games, casinos, skill games, and other types of gaming merchants have been hurt by the worldwide decision to hit “pause” on sports. But the move to online and virtual reality sports games by millions of consumers is presenting opportunities for merchants in the industry. So don’t despair, learn how to pivot during this crisis instead.

Services of online gaming merchants explodes

As mentioned, the demand for online gaming has recently exploded alongside other forms of home entertainment. Those stuck at home are increasingly looking to the internet to provide some form of light relief. Unfortunately, not all gaming merchants are benefiting from the crisis, specifically fantasy sports merchants. (We will discuss this in detail further on in this blog.)

NBA, NHL, tennis, Formula 1, baseball, horse racing, golf, rugby, soccer, and even the Olympics have all been cancelled or postponed. This has left many fans with a huge hole in their lives. As a result, they have turned to games like FIFA to satisfy their hunger for sport. Esports and other gaming providers have been scrambling to catch up. One of the world’s biggest, Xbox Live, went down for a period as it buckled under the demand.

Many are also struggling to process payments with monthly volumes well in excess of agreed sales limits. Many leading providers have switched to subscription models over the years to stabilize demand. But in-game purchases are still causing issues due to the sheer volume heading to the checkout. So what can you do if you’re an online gaming platform looking to build from the home entertainment boom?

Diversify payment methods to reduce risk attached to increased sales

It’s tempting for online gaming merchants to turn to easy-to-setup payment aggregators such as Stripe. After all, it’s a fast and inexpensive way to get started. But this would be a fatal mistake. As transaction volumes increase, chargebacks will increase from customers who’ve had a bad experience or who are looking to play for free.

When this happens you could have your funds frozen or withdrawn, and have your account terminated. Worse, that information could be shared with card issuers, leaving you possibly TMF’d or MATCH-listed. The solution is to find optimal payment processing options to ensure your high-risk business doesn’t encounter bottlenecks.

Look at securing a merchant account. They give you access to your own credit card processing, as opposed to relying on a third-party platform. What’s more, acquirers for high-risk merchants understand how to manage risk and how to provide the best technology to support your business. Particularly during periods of extremely high demand. It’s also an excellent idea to explore offshore merchant accounts if you attract players all over the world. For example, an account with an acquirer in the EU can unlock payment processing for multiple countries and currencies if secured in the same region.

Next, look at multiple payment methods so that you’re not overly exposed to the threat of chargebacks via credit cards. ACH payments, and MOTO payments taken via a domestic call center will help to drive up sales capacity without simultaneously driving up the risks of fraud.

But what about those in the sports betting industries that have been hit hard? What can be done to cater to changing consumer habits?

Sports betting merchants hit hard by Coronavirus can pivot toward success

Lockdowns and national quarantines have been providing a boom in demand for online sports and gaming services. But, some fantasy sports and sports betting enthusiasts aren’t as equally excited. Some merchants in these categories have seen interest tank. Betting firms such as William Hill and many others are beginning to tally up the losses associated with the cessation of sporting activities.

However, they, along with their counterparts are actually in an advantageous position to pivot their offering. What they lack in sports activity, they make up for in their streaming and virtual capabilities.

Some acquiring banks accept skill gaming merchants. Try moving from betting on sports and events to sports-related skill games for jackpot prizes. This allows merchants to cater to the same audience without an extreme shift in business operations.

Of course, with all of these opportunities, it’s important to manage risk so chargeback and refund fees do not eat away at your revenue. Worse, a terminated account can leave gaming merchants scrambling for alternative solutions. ACH, offshore and diversifying domestic payment channels helps prevent loss of sales. Remember, with poor processing history, getting a new merchant account will be harder.

DirectPayNet is here to help your business regardless of where you are at. If you are looking for a merchant account to support the uptick in online player activity, contact our team today!

May 13, 2020
Are Forex Merchants Equipped To Deal With COVID-19 Volatility?

Foreign exchange markets and forex merchants have been weathering the seismic effect of the coronavirus pandemic. Not to mention similar influences on commodities such as gold. Even the usually volatile crypto markets have gone into overdrive. If you’re a merchant selling products and services within this space, that volatility can both help and hurt you. Securing a merchant account is a perfect way to better navigate such volatility.

There are more traders looking to speculate and profit from such volatility. Thus, forex merchants need to ensure the best possible payment processing strategy is in place. Especially as acquirers will view your operation as more high-risk than ever before. This guide will help you to understand precisely why that is, and what forex merchants (and others) can do about it to survive.

Why customers are flocking to trade forex, crypto, and precious metals

Where there is volatility, there is potential profit. The simple act of buying at one price and selling at a higher price is much easier when markets are volatile. For example, the British pound sterling recently fell 100 points against the dollar in one day. This was a reaction to UK’s Prime Minister Boris Johnson announcing that he had contracted the coronavirus. Those trading currency positions in the dollar and pound will have reaped huge rewards.

The volatility isn’t restricted to foreign exchange markets. Both gold and silver have displayed unheard of price fluctuations. Both precious metals are normally stable assets. Hence why they attract so many investors during times of economic uncertainty. But it appears even they are not impervious to the influence of the global economic crisis caused by COVID-19. Those who bought gold in March will be several thousand in profit after holding their position. The price has moved from $1,604.65 to $1,708.10 per ounce in a mere matter of weeks. That growth is set to continue.

The uncertainty caused by the global pandemic has also hit cryptocurrency exchanges. Crypto trading has always been known for its volatility. But customers flocking to alternative investment options have sent that unpredictability into overdrive. Bitcoin alone gained 12% in value in April. Year-to-date it’s increased by 20%, leaving gold bullion’s 12% growth in its rear-view mirror. With growth rates like these, it’s no wonder that everyone is rushing to grab a slice of the action.

Safety is another reason so many investors move away from stocks and government bonds. When an economy is faltering, these assets are some of the only options for a continued return on investment. As companies go bankrupt, consumers all over the world look for safe havens for their savings.

Why the forex, crypto, and precious metal markets are deemed so high-risk

Merchants operating within this space can make vast sums from commissions made on each trade. But volatility in a market can reduce trading frequency. There will be speculators who will look to secure short-term positions for fast and regular profits. Those who employ scalp trading and day trading strategies will be the ones upping their volumes of trades. They will do so by tweaking their trading bot algorithm rules to increase the frequency of trades.

However, those two methods are high risk. Only a select few will be taking on the markets in that manner. The vast majority are looking to buy and hold a commodity. Often, that will be in the form of currency or bullion in the hope that they increase in value. Most investors have chosen to invest in dollars since it’s the only currency that has appreciated since the outbreak. That means once they’ve made their initial investment, they won’t make another trade until it’s time to sell.

This poses issues if you’re a crypto, precious metals or forex merchant operating within this industry. Your volume of trades could fall off a cliff, leading to cash flow issues. Acquiring banks have realized that this is the case, which is why they’ve deemed the industry high risk. Also, any legitimate payment provider requires a license in order to operate in your region.

High-risk merchant accounts need merchants to meet more criteria than a standard merchant account. Those of you looking for diversified payment processing will now need to take extra steps to ensure your application is accepted. This includes having a bank account and a director residing in the same region as where your business is incorporated. Once again, proper licensing for the region where your business is registered and operating is a must. If not, you can forget about getting legitimate credit card processing.

Are you a merchant that offers its customers the chance to trade in precious metal commodities? If so read our comprehensive guide to securing a precious metal merchant account!

For forex merchants, it’s the perfect time to diversify payment processing options

There’s so much volatility in the current market. This means there’s plenty of opportunity for merchants in the forex, crypto, and precious metal trading space to secure record profits. Those not usually involved in these markets are making the switch in their droves. This is because they’re looking to continue their gains usually secured through more traditional means.

But your payments are likely to rise and fall in line with that volatility. Thus, it’s important to install a wide range of payment methods to avoid bottlenecks. Not to mention avoiding issues that could lead to a wave of chargebacks and loss of your payment processing capabilities. It’s crucial at this point to secure the services of a payment provider that understands high-risk business environments. Those without that expertise will likely terminate your merchant account. Often this happens when the going gets tough, leaving your business high and dry.

Here at DirectPayNet, we’ve accrued over a decade of experience of working with forex merchants and the payments industry. We also have clients in other similar high-risk industries. Having that experience gives us a unique perspective. As such, we know what you need to be doing as a business to survive and thrive doing these unprecedented times. Here are a few of the things you need to be thinking about.

1. Take steps to reduce risk

You’re operating in a high-risk business environment. Thus, you need to take steps to show acquirers that you are worthy of a high-risk merchant account. One way to reduce risk is to diversify your product offering. If you usually operate on commissions from customer trades, how can you expand your offer? For example, can you offer a low-price e-book to educate your customers on how to day trade? You will gain a couple of benefits from doing so. For example, you will gain thousands in low-risk sales to offset your high-risk activities. Next, you’ll also educate your customers in trading strategies that are the most profitable for your business.

Likewise, you can begin to offer medium-value courses. You could educate those who are entering the industry to understand how to make profitable trades in markets such as forex. Remember to prevent unnecessary chargebacks, avoid making any promises about making money or give specifics on profits. Tailor your marketing materials to the educational aspect of your products. That way customers aren’t going to submit a chargeback if a trade goes wrong later down the line.

2. Take steps to reduce fraud and chargebacks

Unfortunately, when transaction volumes increase, so does the potential for chargebacks and fraud. So you need to take preventative measures now to ensure continued payment processing. First of all, by acquiring a high-risk merchant account, you can take a look at transaction-level data. This allows you to comb through your payment data. You can then flag any transactions likely to result in a “friendly fraud” chargeback before they cause you any harm. Secondly, acquiring banks that offer merchant accounts can also provide state-of-the-art anti-fraud tools. For instance, you may be able to implement 3D Secure on your transactions. This software uses machine-learning algorithms to approve or deny suspicious transactions.

Once again the benefits of implementing this technology are two-fold. In the first instance, your card not present (CNP) fraud will become reduced. Better still, if you’re a merchant operating in the EU, you will likely need to implement 3DS2 to your transactions by 31st December 2020 anyway. This is in compliance with Strong Customer Authentication (SCA) regulation. Which comes into force before the start of 2021.

3. Readjust your currency portfolio to account for volatility

As mentioned, the majority of investors will only be touching certain currencies, such as the dollar, due to volatility. Some speculators will thrive on extreme volatility. But most will look to trade currencies with more stable and predictable shifts in value to ensure profits. Thus, it’s wise to reevaluate the currencies you offer. If you’ve only got currencies that are highly volatile, you could lose thousands as traders wait on the sidelines.

Don’t take the risk of financial failure in the hope that you can attract huge numbers of scalping and day traders. Instead, beef up your offering to cater to the majority who will be looking to secure low-risk profits through buy-and-hold trades. It’s true that restricting yourself to these more stable currencies could hurt profits short-term. But during these uncertain times, you’ve got to do whatever you can to secure the future viability of your business.

Interest in forex, crypto, and precious metals has piqued, so act now to take advantage

There’s no question. Investors have turned to forex and other alternative investment options in the wake of the coronavirus outbreak. If you’re a merchant in this vertical, this presents an opportunity. But be careful. It could be a double-edged sword. If you chase profits from those looking for high volatility, you could find yourself on the hook for increased fraud and chargebacks. Too many and you could lose your ability to process payments. Instead, look to lower risk and diversify your payment processing through a merchant account.

DirectPayNet is specialized in securing high-risk merchant accounts for forex merchants. We also cater to crypto and bullion business categories. To learn more about how to simultaneously protect and grow your payment processing capabilities, talk to us today before the markets return to normality!

May 6, 2020