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Merchant Account for

Telemarketing, Call Centers, Magazine Subscriptions

A merchant account is something that businesses big and small find to be indispensable. But not all credit card processing merchant accounts are dealt with in the same way. There are some businesses whose merchant accounts are considered to be slightly more difficult to handle. For such businesses, the high-risk account providers come as a boon.

Online merchants, telemarketing and subscription services

A peek at the broad spectrum of online services based companies like telemarketing firms and call centers these are often deemed high-risk businesses. Magazine subscriptions are the other online businesses that are not taken up by the banks to offer merchant accounts. Most of these have large value transactions taking place on a regular basis. Also in the case of such businesses, there is plenty of cards, not present transactions occurring. These transactions might call for a refund if there is an error in the transaction. This could occur due to the absence of a dependable payment gateway. The other case could be when the customer initiates a refund process. In both of these instances, the account provider should arrange for the transfer of the funds to the customer’s account. There are sometimes large chargebacks that are taken care of.

Banks do not approve the application

For such online magazine subscription services and telemarketing businesses banks often deny merchant accounts. This could also be the case with most other popular credit card processing companies. In general, obtaining a merchant account with these credit card processors would be easy. But if the business involves the slightest chance of handling large chargebacks the account would be tougher to obtain. Or the other case could be where the company is expected to pay account fees that are very much higher than the fees for normal merchant accounts. Telemarketing businesses and magazine subscription services have the following concerns:

  • There are large chargebacks involved when there are large value transactions taking place.

  • Fraudulent history or money transactions in this segment.

  • Magazine subscriptions are made with advanced payments for several months. There is always the chance that the customer might end the subscription and ask for a refund.

Banks as well as credit card processing firms often work with limited underwriting process. They do not have a plan of action to deal with such problematic instances that are likely to occur in telemarketing and subscription businesses. The inability to handle the situation might lead to the account being shut down. For the bank, this would be a step to cut down the loss. For the business, this would mean the inability to access the funds until the accounts are cleared.

Whether the Rates Vary by Startup vs History of the business or whether the merchant account provider rejects the application it would be a loss for the business. This loss comes in the form of the money and the time spent in initiating the application process. A safer, more convenient way to get a an account for such businesses would be to approach a merchant account provider who specializes in high-risk businesses.

High-risk business and new business ok’ accounts

These are merchant accounts from the companies that are ready to take up applications from new businesses without any hesitation. New businesses in the high-risk category of businesses are even bigger risks. But still, with the option to take out funds from multiple underwriting banks, the credit card processor handles the situation efficiently. The benefit of such high-risk businesses is that the refund takes place on time. So if it is a new business timely refunds can strengthen the reputation of the business. On the whole, the high-risk merchant account provider makes the handling of the finances easy for the business. High Risk vs Low-Risk demarcation would have no impact on the transaction rates or the access of other features offered. Whatever be the size of the business, the industry to which it belongs and its credit performance the business can avail the following benefits:

  • No application fees to be paid to the merchant account provider

  • Ability to easily integrate all types of payments made through the website, Retail / Card Present / Signature present transactions and through iPhone/Droid Mobile Apps

  • The single merchant account could also be used for ACH Processing/Check Processing steps as well as for payments made through Visa/Mastercard/Discover/Amex

  • The ability to switch to offshore accounts whenever the business demands call for it.

Above stated features make the high-risk merchant account ready for large chargebacks and also easier and more profitable to maintain than conventional accounts.

Domestic and offshore merchant accounts

Every business might explore and tap into the benefits of both these types of accounts at some point or the other. Domestic accounts are great, to set up. Given that the application process takes very little time it is beneficial for new businesses. So they would be able to start the business with all types of payment modes accepted from day one. And the domestic account fees are also low. So there are no additional costs to worry about. As the business expands there might be several overseas clients to be handled. International currency exchange and transfer become simple when there is an offshore merchant account present. This would, therefore, be a valuable addition when the business grows big. The business would have the power to handle a wide range of transactions all with the same efficiency. Remember that offshore accounts may be expensive. So choose an offshore location where your business might attract lower taxes. This would help you minimize the financial burden exerted from an offshore account while also enjoying its perks. Therefore right from the beginning talk to your merchant account provider about the different types of accounts they offer. Keep your options open so that you switch between the different types of accounts when required. This would also ensure that you can continue to work with the same dependable high-risk merchant account provider for the long term.

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