- July 22, 2020
- Posted by: iPay Editor
- Categories: ach payment processing, B2B Payment Processing, best high risk merchant services, Business plans, high risk merchant account solutions, High Risk Merchant Accounts, high risk merchant payment processor, high risk merchants uk, International, Ipaytotal Blog category, online payments, online store, payment processing for cbd products
If you are a merchant account holder your money might be at risk from acquiring banks and payment processors.
No doubt that COVID-19 has changed the lives of the entire world. It has not spared the payment processing industry. Due to the COVID-19 pandemic, many payment processors have suddenly made changes to their terms which has placed merchants at risk. There are few recent highlights from the news for eg. QualPay Inc. has banned processing fraudulent payment processing for high-risk merchants, Square Inc is withholding 30% of payments made to a few merchants, etc. If we need to mention there is a long list that never ends.
Why should merchants be worried? Merchants have started noticing changes that affect their e-commerce business due to these payment processors.
This is not happening for the first time and may not be the last time either that the payment ecosystem has been disrupted.
Is there any way you can secure your merchant account with the right payment gateway?
In this blog, let’s have a look at how to overcome current changes in the payment processing world. Let’s understand how to avoid the worst which processing credit card transactions.
Incidents With A Few Payment Providers And Acquiring Banks
Now we all know what’s happened with QualPay, Square, etc. It is important to understand the possible risks to your merchant account.
The merchants who were processing with these payment processors may experience frozen funds.
Few merchants will be more affected than the others. Some merchants may not be affected at all. The industries which will be most affected are subscriptions, digital products, adult entertainment websites, CBD stores and even forex merchants.
What’s the first thing that happens in this situation? You will receive an email notification from your payment processor that there is been certain policy changes that have gone to effect. Due to this, there might be a closure that might take place.
You are saved if you have more than one merchant account if you are affected by the change. Otherwise, this may result in merchants having a hard time scaling their online business.
I’m sure that you won’t even want to be affected by this. That’s the reason why you need to stay on top of your payment processing strategies.
How COVID-19 has affected the e-commerce industry
We have seen a lot of changes that take place due to the recent pandemic. This has caused a lot of financial distress to business owners. In a report in Forbes: “Small businesses can barely survive as it is, and now that Square… is withholding funds, many more small businesses are going to be closing”.
The most affected businesses are those that weren’t equipped with a sophisticated online setup. What this means is that setting your business up with next-level security, Omni-channels and payment options which definitely brings in a change in the current situation and you want to make sure you never run into incidents like these.
You can contact iPayTotal in such a situation. We are happy to help you!
What Can Merchants Do To Beat the Disrupted Payment Ecosystem
Once you go through this you will be able to understand which is the right payment gateway for you:
- Diversify Payment Options
It is a good idea to have more than one payment processing solution for your business. You will never know when the terms will be changed by your payment processor.
I’m sure you are looking forward to expanding your limits and outgrow your sales.
If you have more than one provider then if there is an issue with one account you can still process with another.
Think about ACH (Automated Clearing House) or e-check processing, ACH processing helps high-risk merchants to accept more transactions if your merchant account is maxed out with sales. The advantage is the rate of the chargeback is far lower.
- Physical Bank Accounts vs. E-Wallets
If you have e-wallet for your business never keep a large amount of money there. Withdraw the amount regularly because you never know knows what might happen to your payment processing that could lead to withholding your credit card payments?
A real bank account is always a better option than an e-wallet. The issue with e-wallet is that some financial service providers close overnight so that’s why an account with a physical bank is preferred.
It is good to find a payment service provider that’ll help you stay compliant with foreign regulations such as iPayTotal.
- Negotiate For Lower Reserve
Reserve might go up to 20% to 30% with a few payment processors. What you need is a low chargeback ratio for you to be in a good position to negotiate lower reserves. And you need to maintain this for about 3 to 6 months in a row.
In case if you successfully convince your payment provider then you will have more amount in your account for your business. Also, this helps if you are planning to open another merchant account, the underwriters will be impressed and might approve your account with lower fees.
iPayTotal has worked with thousands of high-risk merchants and understand the high-risk industry-unique requirements and provide tailored high-risk payment processing solutions. Contact iPayTotal today. Call us at +44 800 776 5988 or email at email@example.com