Friday, November 4, 2011

Merchant Accounts for Pay Today Biz Op (business opportunity)

Just wanted to write a quick note and let you know that we currently have a great solutions for Pay Today Biz Ops. The difference between Pay Today and Rebills is of course that there are no recurring charges after the customer purchases the product.

Rebills, because of the model is a bit tougher, but we do have some solutions for that as well. Pay Today though is a great model and we are setting up a lot of guys who do this. There may be different upsells that during the sales process, and we have some great strategies for that.

If you have an offer like this and are looking to secure processing, either primary or additional, contact me today.

Wednesday, November 2, 2011

Ad Tech NYC 2011 - Merchant Accounts

Ad Tech is definitely one of my favourite conferences, not only do I love being in NYC this time of year, I also love catching up with old friends and seeing what is going on in the industry.

When I ask people if they are going I sometimes get the response that they aren't because its the same thing every year and that there is no need for it. I disagree, I think its important to not only network with your peers (because you can do that remotely) but also to see them in person, maybe meet someone you have spoken to countless times face to face for the first time.

If anyone is going to this show and is looking for a merchant account solution, I would love to speak to you. My schedule on the 9th is pretty booked solid but I will be around the show in the 10th, so if your interested in meeting contact me and lets setup a time.

JR

Tuesday, November 1, 2011

Is Group Buying/Daily Deals dead? Definitely not....

Anyone who knows me knows that I am a big fan of group buying websites. I work with alot of them and we use alot of them...who doesn't love a good deal??

Recently there has been tons of speculation about the demise of this industry and from a professional perspective I don't see that being the case because of the rise in volume that these websites process.

I came across this great article which I think will put alot of things into perspective. Although its about Groupon and their IPO, I think it can apply to many of the larger daily deal websites.

Enjoy - Group Deals Are Dead, So Who Will Buy Groupon’s Stock?

Friday, October 28, 2011

AlertPay VISA and MC processing unavailable?

We are currently accepting applications from merchants who are not able to processing VISA and MC transactions through AlertPay right now and are looking for new or additional processing.

We will do our best to get you up and running as quick as possible, however we will not accept all merchants, only those that have good statements and are running a good business. If you think you qualify please do not hesitate to contact me and provide as much details as possible.

As for my thoughts on AlertPay - I am sure they will be back soon enough. They have been around for quite some time, definitely not a startup and they know this business well. The AlertPay team has stayed in front of this issue and I think are doing a good job handling it.

JR

Monday, October 17, 2011

Domestic merchant account terminated? Time to go offshore!

Lately I have been hearing from alot of my online marketing clients that their domestic merchant account have either been terminated or they have been warned that it will happen soon. This is not at all surprising, in my opinion if you have a "continuity" or "free trial" or most recurring billing type of offers, then you really need to consider going offshore. Domestic banks do not want this business anymore, they are all getting out of it, either because of concerns from the FTC, high chargebacks, reputational risk or a combination of the above.

Even if you are running a very clean ship, have impeccable customer services - you are still in jeopoardy. The fact of the matter is, offshore is where you need to be and I can help you get there.

The problem is that alot of people are unfamiliar with offshore, and it might be scary but I think its even scarier to think about what will happen if you are giving notice that you are going to be be shut down and now you need to scramble. We work with stable banks who have been in this business for a long time and understand it. We make the process easy for you, and you will get paid.

The biggest complaints I get about offshore are below with my responses.

1 - Higher Decline Ratios. Yes it might be higher, but its really only SLIGHTLY higher. There isn't a huge difference and the peace of mind that comes along with knowing you can keep processing definitely makes up for it.

2 - Higher Cost - When you actually look at your effective rate you will see that what you are paying is not that much higher then the blended rate you would get offshore.

3. Longer settlement timing - Yes, its true that it might take longer to get paid, however it is negotiable and once you get some history, you can always request to be paid faster.

The large online marketers have started moving alot of their business offshore, if not all. If this is something you would like to learn more about, please contact me. I can help you out.

Be proactive, get a solution in please before you have to scramble.

If you have already been terminated, I will be happy to help.

thanks

JR

Wednesday, October 5, 2011

Merchant Accounts for Credit Repair, Loan Modification, and Debt Consolidation.


If you need a merchant account, either as your primary or as a backup,  for your credit repair, load modification or debt consolidation business, I have a great solution for you. Unfortunately there are a lot of fraudulent companies that have cast this very legitimate business in a bad light. They disappear with their customer’s money, and because of that most bank do not want to touch this type of business.  With all that being said, there are a lot of businesses operating in this space who are legitimate and look to provide value to their customers. If this is you and you need a merchant account, then contact me today and I can get you setup.

We work with a bank who will take this business, and we know that most likely it’s going to be a high volume account, with a high average ticket, but that is fine.

Some of the things we can offer:
Low Rates (relative to the business)
No Volume Cap or restrictions
International Merchant acceptance
Accept and Settle in multiple currencies
Virtual Terminal

If you are interested, contact me today and let’s get the process started.

JR

Monday, October 3, 2011

Need a Merchant Account but on TMF or MATCH list? I can help.

I have been looking at what search terms are bringing people to my blog and I am getting substantial traffic from people who are looking to get off MATCH or who were placed on MATCH and need a merchant account because of a previous blog post I wrote.  If you are reading this post, and you are in this situation then contact me.

Its a very frustrating situation to be in especially since alot of the time you didn't intend anything malicious but something happened and you were placed on this. I understand that.

I can help you deal with this issue and hopefully get you a merchant account. I have strategies that work very well and solutions you may want to look into. So, if you got to my blog and are having TMF or MATCH issues - let me help.  As much as I do love writing about payment processing, I am in the business of working with medium to high risk merchants and getting them set-up with merchant accounts, so as much as I do want to be informative, I also want your business!

JR






Friday, September 30, 2011

If a merchant account offer sounds too good to be true, it probably is.

I had just received paperwork from a client late last night, and as soon as I got it I submitted it to the bank for review. This client is in a rush to get the merchant account live as there are some pending rebills that need to go in, which I completely understand. I had told my client that I am going to do everything possible to get the MID live ASAP. What this client told by another party is that they could have the MID issues, from the same bank, in 1 day. 

I have been in this business for a long time, and getting a direct merchant account the same day your paperwork is submitted is basically impossible.

So, when speaking to you ISO or processors, if they say something like this, or have claims that just seems a bit too out there, then you can expect a couple of things.

1. They are just trying to get your business and will tell you everything you want to hear. I personally don't like doing business this way, I would much rather manage my clients expectations right from the get go and then hopefully exceed them. I have learned that honesty is really the best way and what allows me to get repeat business from my clients. I would much rather tell a client bad news and work on a way to resolve the problem, then lie. The merchant services industry does have some shady characters, promising the world. Those are the people out there for a quick buck, not long term relationships.

2. They are not setting up the account correctly. If you are interested in a quick smash and grab, then I am not interested in doing business with you. A lot of work goes into setting up and managing accounts and its my goal to provide you with a long term processing solutions, and that is also what I expect from my clients. I ensure accounts are properly set-up and that allows for you to process your business through for a very long time. You shouldn't want to work with someone that tries to cut corners as your merchant account will just end up blowing up in your face.

We don't require exclusivity but our clients do give us all their business because they trust us, they know we are working for them, and that we are in this for the long terms. I will also review offers from other merchant services companies that my clients get to give them an honest opinion. If you have a question or concern, please do not hesitate to contact me.

Remember if it sounds too good to be true, it probably is!

thanks

JR


Thursday, September 22, 2011

Denied! What to do if your merchant account is rejected or declined?

Having your merchant account application rejected can be an extremely upleasant (to say the least) experience. You have spent tones of time and money building your website, developing your marketing, working out the relationships with your suppliers and you didn't have a doubt in your mind that you would have any issue with your merchant account. This is something that I hear from alot my clients, they assumed that getting the merchant account would be easy, but there was nothing easy about it.

The first thing you need to look at is what industry you are in and if you are in a high risk sector like adult entertainment, travel services, online pharmacy, escort services, dating, telemarketing, high-volume or multilevel marketing. Not every bank, in fact the majority of banks, will not take this business. One of the biggest value adds that I can bring is that I work with alot of banks around the world I know what banks take what type of business. So, working with me gives you a much less chance of being rejected.

But, what to do if you are:

1. Contact me. Seriously. I will get you a merchant account.

2. Understand the why your application has been rejected, both so that you can better deal with the issue, and so that you are better informed and equipped to move on with your business. There are many reasons why banks accept or decline application, it could be a minor mistake on the application or inappropriate answers. I review all application completed to stop these types of errors before they happen. Some other things that can happen.

Lack of documentation - Didn't send in all the documents required. However if your bank would just reject and not ask you for whats missing its probably a bank you don't want to work with anyways.

BBB (Better business bureau) complaint record

Record of Rip-offs or bad publicity on the internet. Banks are very concerned about reputational risk, so they dont want to be associared with companies that have a history of ripping people off.

Being on the TMF or Match list - see this post here


3. Be completely honest when applying for a merchant account. Tell about what happened with previous merchant accounts, have you declared bankrupcty, etc. This information is used to evaluate your company's risk and I always ask my clients to be completely honest as it allows me to better help them. Its like going to the Doctor, you want make sure they know everythig so they can properly treat you.

4. Slightly modify your business model. Making changes to your procedures and Web site and billing model can help you avoid being classified as a high-risk merchant account or less of a high risk account.

5. Find a reliable merchant broker or consultant. Sometimes (alot of the time) instant merchant account Web sites are scams and it is critical to choose a trustworthy merchant account provider for your high-risk business.

You will also see merchant account providers advertise that they have a 98% rate of approval or even higher, but that is because these companies do something called as a “Pre – Qualification” process on their customers before accepting their application for opening a merchant account, with them. Its just a marketing technique...

6. Create a cash reserve for your business to avoid being denied because of chargebacks. If you have money in the bank or strong business financials the bank will definitely see you as much lower risk.

While your merchant account may be seen as a high risk, there are specific companies and services that can offer solutions. There are high-risk merchant account providers and offshore merchant account programs that use a network of banks internationally. This is who we work with and this is a part of the service we provide. You should spend time focusing on your business, while we get you the best merchant account possible. .

If you can establish what they reasons are for the accoubt being declined, you will be better prepared to for your next move. Learn from your errors, so that you will have more success in the future, whether it be with a new application to a different bank, opting to work through a merchant account provider, or trying to set up an offshore merchant account.

If you have been declined, contact me for possible solutions. There are no additional costs to work with us, as we generate revenue from our partners and because of the volume we bring them, the pricing you would get with us would probably be lower then if you went direct.

If you have any questions, don't hestiate to contact me.

JR

We help banks become offshore acquirers.

One of the many things that really seperate us from others is that we don't only provide our consulting services to merchants, we work with a quite a few banks to get going and starting to process for online companies. Currently we are workig with a bank in Europe, a bank in Asia (Taiwan) and a bank in the Carribean who are new to international processing.

These banks are run by bankers of course, so they don't have the experience or background when it comes to medium to high risk ecommerce processing. We do.

We help them set up procesing relationships, we help them with their underwriting policies, we help them with their reporting, we help them manage their risk/exposure and we will help them determine pricing/revenue models.

Because of this unique relationship with banks globally, we are able to place business that nobody else has. We have some unbelievable relationships with banks that have been processing for years, but we also have "virgin" banks.

So, if you are a bank and you are looking to start in acquiring, get in touch. We can definitely help you out. If you are a merchant looking for some "different" processing solutions, we can help you there also.

JR

Monday, September 19, 2011

Merchant Accounts for HCG offers!

Originally prescribed to treat infertility in women by triggering ovulation, HCG is probably one if the hottest products in the online marketing world today. I am asked, literally, on a daily basis if I can get merchants accounts for these types of offers. I am happy to say the answer is YES.

Currently are boarding HCG merchants that:

1. Are established - meaning they have processing history
2. Will go offshore

Domestic HCG accounts are almost impossible to setup, so if you have one, you are very lucky but I would seriously consider setting up an offshore accounts because your domestic account will not be around forever.

If you are interested in setting up an HCG merchant account, contact me today!

Thursday, September 15, 2011

Consultant vs Agent. How do we differ in the high risk processing business

When speaking to prospective clients, sometimes I am asked "are you an agent?" and the answer to the question is no, although there are some similarities, it's quite different.

Agents basically act as sales arms of ISO and/or credit card processors. Having worked at one of the largest processors I came into contact with alot of agents. The way an agent typically works is they will get an application from a prospective merchant. Then they will shop that application around to all the processors/ISO's they have relationships with, and hope to find a home. Then they are done.

What we do is very different. We work with a select few processors who we have very strong and longstanding relationships with. I prefer to work with less partners, but with those who I know can deliver. However, not everyone is strong in all areas. For example some have great solutions for dating, others for adult, or pharma....the list goes on. We know exactly who is strong where and that is where we place the business.

The biggest difference though is the extra value that we add through our consultation. We know the rules, we know what works, we know what will help with chargebacks, we know the tools and we know what works and helps other clients of ours. We share that with you. We will help with chargeback reduction, we will help with banking redundancy, website compliance and much more.

So, not only do we setup the merchant account, we also will help you manage it. I am strong believer in letting you focus on what you do best, which is grow your business. Let us manage the merchant account for you. Let us be your advocate.

We have no interest in just shopping deals around, we look to build longterm partnerships and we are constantly looking for new solutions that will help you. Whether its high or low risk, offshore or domestic - this is what we love and this is what we do.

I don't want this post in any way to be seen as negative towards agents. I have worked with many, they are sharp and know the business. Some are extremely successful and alot of ISO/processors rely on them for new sales. We just take a different approach.

One problem I do have with agents, is when too many people are in the middle. Meaning, you have an agents, who passes a deal to another agent, who then passes the deal to either another agent or the final processor/iso. You run into issues where there are too many layers, too many people involved and nothing gets done. We only work with people who are direct to bank or directly with the bank itself.

In the high risk processing business, you never know what can happen. Your account can be shut down, and if you lose your processing you are in big trouble. Could end up on the TMF list or worse, fines. Our goal is to make sure you are always running and have the best possible options at your disposal.

If you have any questions about how we can help you, please do not hesitate to contact me.

JR

Tuesday, September 13, 2011

DDDD (Daily Deal Dynamic Descriptor) helps reduce chargebacks and customer service overhead

At Social App Merchant we are always looking at new ways to leverage technology to improve the way our customers operate their business. Daily Deal websites are a big part of our business, and although the industry is in its infancy, we are definitely one of the payment service providers who have quite a lot of experience in dealing with these clients. In previous articles I discussed if Daily Deal websites are high risk, I don't believe they are and that is because I know what the best practices are for ensuring chargebacks are kept in check. And, with all my clients in this space I like to work with them to ensure they are in compliance with these best practices as its beneficial to everyone.

Back to how to leverage technology, we have introduced functionality that allows a daily deal website to pass through name of an actual deal to appear on the credit card statement descriptor, and not just the deal site and customer service phone #.


A merchant descriptor looks something like this:

DAILYDEALSITE

Dynamic descriptor gives the merchant the ability to control the descriptor on the credit card statement of the customer. Adapting this feature to our previous example, we get:

DAILYDEAL*GreenSpa

The “GreenSpa” would be information that the Daily Deal website would be passing with the transaction .

As Daily Deal websites grow in popularity, we are seeing that consumers are making many purchases at the same deal site on a monthly basis. They may see three charges from the same site but may not remember they made those three purchases. Also, they could have purchased several deals across two or more daily deal websites. By implementing daily deal dynamic descriptor (or DDDD - I like that!) functionality, your customers will know exactly what each charge is for. This will reduce the number of call center and email inquiries you receiver as well as reduce chargebacks.

If you are a Daily Deal website and would like to learn more about this, contact me! If you are looking for a processing solutions, we can definitely help there. Take a a look at www.socialappmerchant.com for information

JR

Monday, September 12, 2011

My new home - Patricia Weber Consulting!

I would like to take this opportunity to let everyone know that I have joined Patricia Weber Consulting as VP High Risk Merchant Management. I have known and worked with Patricia in the past and I am extremely excited about this opportunity. My main goal is to work with Internet Marketers to find the best possible credit card processing solution/s available to them. This is what I have done for the past few years and its what I love doing. Internet Marketers are by far the most innovative and fun group of people to work with. Some of the things I will be doing are:

- Setup merchant accounts and banking relationship for online marketers who fall into a higher risk category.
- Manage merchant account relationships acting as an advocate on behalf of their business
- Assist with expansion into the global marketplace
- Implement best practices to improve the customer experience.
- Recommend tools to reduce fraud and increase conversions.
- Prepare and execute a chargeback reduction plan
- Help high volume merchants spread volume across multiple banks to reduce the risk of their account being terminated without having any back up processing in place.
- Work with high volume merchants to increase their processing bandwith by setting up accounts with either no cap, or multiple accounts.
- Work with merchants to manage their accounts, monitor chargebacks and ensure processing uptime.
- Offshore company formation (when needed)

You can read more about our services here - www.patriciaweberconsulting.com.

In addition to our consulting, we also have another division called Social App Merchant. Social App Merchant focuses more on emerging markets and businesses that are "out of the box". As an example, we work with a lot of Daily Deal companies, mobile dating, etc etc. So, although the business might not be high risk, alot of banks don't really understand. So, we work with these merchants to find the right solutions for them.

You can read more about Social App Merchant here - www.socialappmerchant.com

I am very excited about this next stage or my career and working with Patricia. If I can help you and your business out in any way, please do not hesitate to contact me.

thanks

Jared

Thursday, August 25, 2011

Terminated Merchant File, TMF, Match List. How to get on it and what to do if you are.

There are some lists you want to be on like a VIP list, a guest list, or a Christmas card list. But the TMF is one list that as an online merchant you don’t want to be on.


I speak with Merchants all the time who have been placed on the list, and usually I am able to get the a merchant account, offshore, as long as they can provide a letter the shows why they ended up on the list, and what steps they are taking to ensure they don’t run into the same problem again. The banks are I work with are open to this and understand that not everyone on the list is bad. So, being on this list is not a death sentence, but it can definitely suck. If you are on the list, and you need help, contact me and let’s evaluate the situation and let me help with solutions.


Getting back to the list, let’s start with the basics. What exactly is the TMF or Match List? The Terminated Merchants File (TMF) or match file is basically a list of merchants that have had their merchant accounts closed down by their processing bank on negative terms. If you are placed on the match file, you, any partner of your business, your business itself, and possibly anyone at your address can not sign up for a merchant account with a US based processing bank. Processing companies take the match file very seriously.


When you apply for a merchant account, the bank or processor will check to see if you are on the Terminated Merchant File (TMF). If you’re on it then this sends up a red flag to banks that you’re a credit risk. The chances are slim to none of getting approved once your name hits the list. Getting on the TMF list is the equivalent of getting blacklisted. However, as nice as it would be to say that that every business that is placed on a terminated merchants file deserves it. It’s absolutely not the case.

Now, how can someone get on this list you ask….well unfortunately, its not that difficult, the challenge is getting OFF the list, even if you didn’t deserve to be on it. Here are some of the most common ways of ending up on the list.

• Credit Card Fraud. If don’t have strong enough fraud control and detections, you can end up with way too many chargebacks.
• Friendly fraud. This is when a consumer disputes a legitimate charge such as from an adult website.
• Factoring. Factoring is when a merchant deposits transactions for sales generated by another business.
• Excessive chargebacks-approximately 1-2% of sales.
• Deception Marketing and Fraud. Types of fraud include not delivering products or misrepresenting products or services.
• Violating the terms of your merchant agreement
• Owing money to a bank or processor

Also, keep in mind that because of your merchant account provider, you could wind up on the TMF if your provider counts chargebacks in the month it comes in instead of the month the original transaction occurred. If you do fewer sales in the month the chargeback is processed, your chargeback percentage could skyrocket, and you end up on the list.

Regarding the last point above, owing money to the bank or processor – one of the easiest way to get on the list is to close your contract with a merchant provider and not pay your final bill. This is basically a guarantee you will end up on the list. Your final bill includes any processing costs that you owe, but also includes any monthly, yearly, or termination fees that were specified on your merchant contract. You are also liable for 6 months past the settlement date of the final transaction that was processed on your merchant account. The settlement date is defined as the date that the service or merchandise was fully delivered to and accepted by the customer.

How to get off the list, like I mentioned above is very challenging. Basically, the only company in the world that can get you off the TMF, is the company that put you on it. It does not matter who you talk to, what they promise, who they are, or anything else, it always comes down to the company that put you on it. Businesses usually learn that they are on the TMF when they try to open a merchant account with another company.

The company that puts a merchant on the TMF is the processor that is taking on the risk of allowing the business to process with them. These are often the back end companies that you may have never had any personal contact with. Merchant Service Providers and resellers are not normally the companies that can put a merchant on the TMF, unless they are taking on the risk of your credit card processing, so calling them may have no effect, but regardless, the company you signed up your merchant account with is who you should contact first. As soon as you find out that you’re on the TMF, call your merchant account provider-or the company that placed you on the list. Prepare to work to speak to many departments until you get in touch with the right person. You might end up being referred to the processing bank.
Depending on why you are on the TMF, it can be easy to impossible to get off the TMF. If you are on it for committing fraud yourself through your own merchant account, don’t count on ever getting off. Processors do not like fraud in any way, and if you as a business owner were the cause of it, they will not ever want to provide services to you again.

If you believe your business or name was mistakenly added to the Match file, you must work with the acquirer that added the listing to the file. Only the company that placed you on the list is authorized to request a change or deletion of the information.

If a business was placed on the match file for a high chargeback ratio, time is normally the only thing that will get the business off. The processor needs to know that they aren’t going to get stuck with any unanswered bills from the merchant’s former customer’s Chargebacks.

If you didn’t pay your final bill, it may just be a matter of making good on your debt with your former processor. I have seen this as low as a few dollars, and the merchant was removed about a week after they made payment.

Unfortunately the majority of the time it is not that simple to get off the match file. It normally takes several weeks to get off the match file. Sometimes it takes negotiations to get charges cleared up, or fees removed. At this point every case is unique. If after a few weeks you are not making any headway, you may need to consult a lawyer. Processors normally use a system called arbitration to avoid taking individual cases to court. It is cheaper than going to a court, and the results are often better for both parties.

Here are some tips for staying off the list:

• Don’t go over your processing limit, if you think you are going to speak to the processor first.
• Don’t use any deceptive billing, be upfront with customers about charges and when the charges occur. Always provide easy access to customer service.
• Have the customer service number on the credit card descriptor. You want them to contact you before the bank.
• Always provide top notch customer service and make sure there are open lines of communication.
• Monitor your transaction closely, if something appears out of the norm then investigate immediately.

If you have any questions about this posting, or how you can get processing even while being on the TMF list, please do not hesitate to contact me.

Monday, August 22, 2011

What priorities will FTC stress in its impending online advertising guidelines

Although not directly related to payments, this is an interesting article and will be even more interesting to see the new guidelines. This is something all online marketers should be aware of.

http://ftcbeat.com/2011/08/21/what-priorities-will-ftc-stress-in-its-impending-online-advertising-guidelines/

Monday, August 1, 2011

Merchant Accounts for Biz Ops ( and ways to help reduce chargebacks)

Anyone who is not familiar with Internet Marketing may ask, what exactly is a biz op? Well as I am sure you can tell, Biz Op refers to “Business Opportunity” and basically a biz op is a program/course that is created by someone to help other make income (usually from the comfort of their own) online. A lot of the biz ops are people who have made a lot of money with affiliate marketing teaching others how do to that exact same thing (and of course charging a fee for it). Some have free trial offers to sign up, then charge a membership fee to continue having access to the backend and the tools there. I have seen some very impressive and sophisticated backend’s with tools that I believe can really help someone.


However, like a lot of other things, a few bad apples ruined the bunch and biz ops have gotten a bad name amongst banks for credit card processing. Why is that? Well excessive chargebacks for one and shady people who are really only out there to make a quick buck.


I have been working with a lot of biz op marketers lately and the guys I work with know what they are doing. They have a sophisticated product, clear terms and good policies and procedures in place to reduce chargebacks.

Some of the strategies that I believe a biz op can put into place that will help them reduce chargebacks are:


1. Have good support channels. Your company should be accessible, communication and an active support forum can be helpful.

2. Methods for success should be clear.

3. Clear Fees. Costs are justified because people understand they can’t expect to earn money without an investment. Costs and Fees will actually legitimize the business because nobody would actually expect to earn money on something that
is free. Membership fees can also be justified if some kind of benefit to
insure your success is made available. It costs money to run a business and in
many cases it takes money to make money. An example would be if the company
hosts websites and/or other promotional aids to help you succeed (a detailed
back office for instance).

4. No Outrageous claims – “Work only two hours a week – No selling – No dealing with customers – Make millions” – No way…


Like I mentioned earlier, sometimes credit card processing/merchant accounts for biz ops are hard to obtain. I work with quite a few banks both domestic and offshore who do work with legitimate biz ops. I have heard horror stories from a lot of clients who were shut down by their previous processor for a variety of reasons and the biggest one I believe is that they just didn’t understand the business. Like any recurring billing, there is a higher risk of chargebacks so not only do you need strategies like the above to help reduce chargebacks but partners who understand the nature of the business to help you ensure that your processing will not go down.
This could include using a chargeback management system, as long as the ROI make sense. Spreading volume between multiple banks, including offshore and domestic. Or just going offshore and having more of a margin to operate in.

What I do is evaluate my client’s current situation (if they aren’t a start-up) and make recommendation and propose solutions. If they are a start-up I look at their marketing plan, where they are getting their traffic from, etc etc and propose a solution that will keep them up and running. A lot of processors won’t take biz op without processing statements, I can help with that.


Of course, like everything, pricing is factor. But any experienced marketer will know that paying a bit more to ensure your merchant account stays up and running ( as opposed to working with a company that offers cheap rates then shuts you down as soon as there is a problem) is worth it.

If you have any questions please do not hesitate to contact me.

Monday, July 18, 2011

5 ways for online marketers to increase conversions

If you have or have in the past operated any type of ecommerce website then you are probably familiar with low conversion rates and you probably have looked at things like time on page, time on site, cart abandonment, keyword conversions to try and improve those low conversions.


According to a recent study, about 10% of visitors to the average ecom website are actually there to consider making a purchased, and only 2% will actually make that purchase. 2%!!!!!


2% is a very low number for ecommerce (unless that is your chargeback ratio) so what most online marketers will do is try and push even more traffic to the site. The numbers do work, since 2% of 1000 is a lot more sales then 2% of 100. However, what about that 8% that were interested? How can you convert them? Increasing traffic is always important but why not look at some ways to increase the conversions to your site as well.


I believe that improving conversions is not only to look at the actual site, but look at suppliers to your business. Is your credit card processor the best fit? What about your call center?


Here are a five ways I think you can make your site more attractive to potential customers and increase conversions.


1. Look at declines from current Credit Card processor.


Depending on the type of account you have, where your customers are coming from and host of other factors, your decline rates might be way too high. If you have a US merchant account, but a significant portion of your traffic is international, then you may look at opening a international merchant account that you can process international transactions from. I have seen a lot of companies really increase conversions by doing this.


2. List popular items


This is very easy to do my looking at search queries and what is hot on your site. This is clearly what people are looking for the most and if you make it easy to find but putting it right in their face, you will have a better chance at selling it to them.


3. Engage your customer if they are taking too long.


This is great strategy if you see that customers are spending too much time on a certain page or on the checkout. Try and initiate a conversation through online chat to see if there are questions that the customer has.


4. Listen to your customers


Anyone can look at a best practice guide, but the best resource available your customer. Implementing a customer feedback system so you can see what people have issues with AND what they really like. But don’t just listen, it’s very important to take the feedback and address it on your website if you think its valuable.


You can also look at using incentives to get better feedback. Maybe entering customers into a draw of giving a prize if the feedback provided is valid and can be used.


5. Customer Service is Key.


Imagine walking into a store and you have some questions about a product you would like to buy. However, when you look around there is nobody to ask the question to or to help you. If that was me, I would walk out. The same principle applies online. Make sure your customer service is always available and can respond in a very quick manner. When a customer is making an impulse purchase, you need to make sure you address any concerns immediately before they are given the chance to walk away.


Having a great FAQ section, clear pricing shipping and return policies can address a lot of questions upfront, so make sure you have that in place. Also consider adding a live chat service.


In summary, online marketers invest massive amounts of money and effort to get visits. But if your site or service isn’t optimized to convert those visitors then a lot of money is being left on the table.

Tuesday, July 12, 2011

How to be effective when looking at your online merchant account pricing.

As mentioned in a previous post, the pricing quote you receive is not always the price you are going to actually pay. Anyone that's had to deal with online merchant accounts and credit card processing (with the exception of those that process strictly offshore) will tell you that its can be a pretty confusing subject. When you looking for a new merchant account there is a lot of things you need to factor, and although I have stated that price isn’t the only thing and that value is extremely important, you still need to understand exactly how your pricing works. So, when you start looking for a merchant account or would like to evaluate the one you currently have, there is a lot that needs to be taken into consideration. You've need to look at the discount fees, qualification rates, interchange, authorization fees and more. The list of potential charges can go on and on.


One of the biggest dirty secrets in the online payment processing space is to quote a merchant the qualified rate, which sounds great, but not really disclose all of the additional fees that you will pay. This is something that unfortunately has become common practice with too many companies these days (not all) and its something that I hear from merchants I work with all of the time. This is where most of the margin is, and my belief that it’s important to disclose all fees and teach merchants how the pricing work. I think if you are honest with a merchant then it’s much better for you in the long run.


Instead of looking at the big picture, merchants fixate on a single aspect of an account such as the discount rate or the early termination fee (which is a fee I am not a fan of). I completely understand this as I would do the same in a business that I am not familiar with, but what really needs to be looked at is what we call the EFFECTIVE RATE. Once you start looking at the big picture you will see that merchant accounts aren’t that hard to figure out and you will be able to not only accurately forecast your merchant account costs but also compare different quotes you receive.


The term effective rate is used to refer to the percentage of NET sales that a business pays in credit card processing fees.


For example, if a business processes $100,000 in NET credit card sales and its total processing expense is $4290.00, the effective rate of this business's merchant account is 4.29%. The qualified discount rate on this account may only be 2.25%, but surcharges and other fees bring the total cost over a full percentage point higher. This example illustrate perfectly how focusing on a single rate when examining a merchant account can prove to be a costly oversight.


Effective Rate = Total costs/ total sales


You need to make sure you are also looking at all of the possible fees, this can include:



  • Discount Rates

  • Monthly Service Fees

  • Statement Fees

  • Batch Total Fees

  • PCI/DSS Fees (Data Security)

  • Administrative Fees

  • Transaction fees

  • Any other miscellaneous Fees


In my opinion, when looking at costs the effective rate is the single most important factor when you're comparing merchant accounts. But again, cost shouldn’t be the only factor when deciding on the merchant account.


Calculating the effective rate of a merchant account for an existing business is easier and more accurate than calculating the rate for a new business because figures are based on real processing history rather than forecasts and estimates. Calculating the effective rate of a merchant account for a new business is a little tougher because of the lack of processing history from which to judge how a business's transactions will qualify. Nevertheless, making a conservative estimate of an account's effective rate is still vital.


To calculate the effective rate of a merchant account for a business without processing history you will need to estimate a few figures such as the business's average ticket, processing volume, etc. The actual methods involved in calculating the effective are pretty involved and beyond the scope of this article. Hopefully, these calculations aren't something you should have to worry about. In this case I would work with an experienced consultant of or a processor you can trust


If the effective rate ends up being significantly greater than your qualified discount rate, or the rate you were quoted, it’s time to re-examine your account and make changes. Using the example above, let's say the qualified discount rate for this account is 2.25%. That would mean the effective rate of 5% is more than double the qualified discount rate. In a situation like this, the chances are very good that there are a lot of additional surcharges being applied and you can either have a discussion with you current provider ( but would you want to work with a company that already has been deceitful) or look to work with a new provider.


Any provider that's courting your business should be able to speak with you and request the information they need to offer you a reasonably accurate effective rate. Alot of times this will be in the form of previous processing statements (if available) If they're unable to do this or they don't know what an effective rate is, they're probably not the best choice for your new merchant account provider.


If you need any help with deciphering credit card statements or if you are looking to get an effective rate quote on your business - please do not hesitate to contact me.




Monday, June 20, 2011

"Too many people today know the price of everything and the value of nothing.”

I wanted to write this quick post as alot of the time, especially at this show that I just went to, alot of the merchants were solely concerned with price. I want to point out - My pricing is always competitive and alot of the time I win deals on lower pricing. Now that is out of the way, I think that merchants who look at merchant accounts, gateways and any type of online processing solely on price, are making a big mistake. Instead of pricing, look at VALUE.

There are so many other factors to consider, and I do believe that pricing is important, but in there is a saying "you get what you pay for" and in payments that holds true as well. Questions that should be asked are:

1. Does the technology work for me? What features does it have that can make my life easier? Does it allow for recurring billing? tokenization?

2. How is the reporting? Do the reports help me streamline my business? It it in real time and available online

3. What is the customer service experience? If I have problem is there someone I can call and talk to? will they help me with technical issues? Its important to look at processors that have high merchant retention rates. Savy merchants won't just switch to get a better price unless its drastic and customer service is a very big reason for that.

4. How long will it take to get my money? As we know, cash (flow) is king, and businessess need it to survive - so would you rather pay a bit more and get your money faster, OR pay less and wait to get your money. I had a client who recently switched over because of this very reason even though I had quoted rates that were a bit higher.

So, just like everything in life, when selecting a payment provider, look at the VALUE. Maybe the actual pricing is higher, but the positive effect it can have on you and your business is what should be looked at.

In another post I will explain why you the pricing you are quoted is not always the pricing you get, and why you need to look at the effective rate.

Contact me if you have any questions about the above.

Internet Retailer 2011 - Review

Last week I was in San Diego for Internet Retailer 2011 - it was my first time going to this show. I go to the usual shows(AdTech, Affiliate Summit) and I wasn't exactly sure what to expect. My initial thoughts are that this is a very good show for certain suppliers to ecommerce but I found that traffic within the actual show floor wasn't as great as I would have liked and it seemed to be concentrated to one end more then the other. I think that alot of the attendees were busy most of the day in sessions and didn't have a huge chance to walk the floor. The people I want to speak to are the online merchants, and there weren't THAT many walking around. It seems it was alot of exhibitors and as much as I love the "maybe we can setup a referral partner" conversation...its not the best for business and I find those conversations don't usually lead anywhere.

I was expecting a completely different crowd, but I did get to see some familiar faces from the other shows I attend and hopefully can do some business with those guys. I also did get a chance to speak to a few new potential clients and I think something can happen there.

The days were very long (9AM- 7PM) so I know that next time I need to wear better shoes. Also, San Diego is a very beautiful city, its clean and from what I can tell very safe. The weather was slighlty colder then I expected, and seemed to get very nice everyday after 12 PM.

All in all, I dont think that this is the best show for the majority of online marketers, maybe a good show for retail companies that are looking to, or already have an online presence which I guess is the type of merchant they are going for considering its called Internet Retailer.....

Some of the exhibitors were Daily Deal companies that were looking for merchants to sign up. I see this as a waste or money. This was not the right show for that.....

All and all a great show, but I am happy to be home now. Travelling is overated sometimes...especially when you have been doing it for a couple of weeks.

Wednesday, June 8, 2011

Merchant Accounts for Online Dating websites and ways to mitigate the risk.

Typically, online dating sites that offer monthly memberships and especially those that offer free trials are considered high risk. The reason being that most banks and processors don’t want to deal with the high refund rate and chargebacks that are typically associated with this business Of course, that is not true of all dating sites as I am sure most would love to secure e-harmony’s business. But what I see a lot of these days are dating sites that are niche specific or have some other distinguishing factor (like being free). I have worked with quite a few dating sites and have helped them secure both domestic and/or offshore processing and at the same time helped them resolve the inherent issues of the business.



Dating websites do tend to have a significant amount of volume, which in turn equals higher chargeback’s, so you should definitely work with a company that understands this business AND has experience. Issues will come up and having a company that will work with you through the problems and not just shut you down is important.



In its simplest form, online dating is a way for people to make contact and communicate with the entire point of this to get an understanding of each other with the hopes of meeting in real life, if both parties feel comfortable in establishing a sexual or long term relationship. Its estimated that in the US alone, over 600 million is spent yearly on online dating.



So, besides the high volume and high chargeback/refund potential, there is also the possibility of fraudulent activities – which makes online dating processing high risk. Some examples of Fraud that has taken place is prostitution being advertised on the website. Also there are a bunch of scams that are being run, here are some recent examples:



“The woman who used a dating site was contacted by a person claiming to be an American soldier called Lt Brian Rivera.


After engaging in conversations over a month, she sent nearly £4,500 to an address in America, supposedly paying for flights for the soldier to come and visit her in Britain.

However, he failed to arrive and when she re-contacted his ‘site’, another soldier, Lt Troy said that he had been kidnapped and there was a £5,000 ransom.

At this stage the victim realized she had been ‘scammed’. “

I would advise a website to make it a point to tell their customers that sending money to someone they met online, but haven’t actually met in person is a VERY BAD IDEA. You would think that this is common sense, however its clearly something people do quite a bit of. Another example:

“Police say they woman was swindled out of nearly $13,000 by a man from Malaysia, and she's probably not going to get the money back.

The scam was reported to police last weekend.

Police say she met the man through a legitimate online dating service and developed a relationship via emails, text messages and telephone conversations. The man said he was having "financial difficulties" and she wired him money over several months.

Eventually he stopped contacting her and she discovered that his email address and telephone number were no longer in service.”

Prostitution scams are usually straightforward; they put profiles up on dating sites to get business. These profiles are usually recognized by sleazy names but, how do you combat all of this.



Here are some tips:

1. Consider using 3D Secure and AVS. Some people argue that this can decrease conversations and they may be right, but the alternative can be much worse.

2. Work with a 3rd party company that can help you review and moderate profiles on your website – contact me for recommendations.

3. Encourage your members/customers to report any scams or potential fraudulent behavior to you.

4. Work with a processor/company has different risk/threat tools that you can use. For instance IP checking, so you can block potential fraudulent activity based on parameters you set. For instance, a US credit card cannot be used at a Russian IP.

5. Examine your traffic sources and see if you are getting a higher fraud/chargeback rate from any source in particular. Its much better to have good quality traffic that you pay a premium on from a reputable source, then cheap traffic that is causing you a lot of headaches.





As always I am here to help. If you are interested in exploring options for a dating merchant account, have questions or even your own recommendations - contact me.

Tuesday, May 31, 2011

Invest in MIDJR at Empire Avenue!

So I heard about this thing, Empire Avenue, on John Chows blog…and I figured I would give it a try.

I am not going to write a post about how to use it, but basically it measures your activity on certain social networks, and is similar in some ways to other influencer measuring tools such as Klout and Peer Index.

Where Empire Avenue is unique is that your value can effectively be peer-reviewed by others buying and selling shares in your score, giving you an incentive to remain a valuable commodity and remain active on your social networks.

It’s actually startlingly addictive.

Part game, part ratings system, Empire Avenue works by allowing users to create a ticker linked to their activity on various social media profiles like Facebook, Twitter, Flickr and YouTube. The system measures that activity and the level of engagement your content provokes, and then assesses your share price based on that activity. People can buy shares in you and you can buy shares in others, which leads to a virtual social currency that moves up and down just like a stock.

So far the virtual currency, Eaves, are only available in the game but I understand they are plans for you to be able to exchange the currency for real money/goods. Also, some corporate players have gotten involved, specifically Ford.

At its highest level its networking, gaming, aggregation and social media status in one fun little package and I suggest you give it a shot!!

Monday, May 30, 2011

Guest Posts Wanted!

If anyone is interested in being a guest blogger, I would love to have you. Content would have to be focused on payments and internet marketing. Contact me if interested.

Google Wallet and its effect on Online Marketers

How does the announcement of the Google wallet effect online merchants. Well, as far as I can tell – it doesn’t. Its important to note that Google Wallet is separate from Google Checkout, and can be thought of as the brick-and-mortar counterpart to the online payment nature of Google Checkout


What Google basically did is take the concept of the ewallet, which has been around online forever, and take it offline. So now you can attach multiple funding methods to the wallet, and then use it wherever the wallet is accepted. Online this has been used for everything from online gaming, to digital music downloads, discreet purchasing and for many other reasons including payouts of funds. The reason Google is doing it is to simplify purchasing, and I love the idea. I hate carrying cards around, however I use a blackberry so since this is only available on the Android, I can’t use it.


There are tons of other articles online that explain what the wallet is, and how it used NFC to process the payments so I am not going to get into that, my focus is strictly on online payments. So, while Google Wallet obviously is geared toward consumer convenience, it also has some hefty implications for internet marketers who work with offline retail stores, not those that strictly sell online. Users will also be able to load coupons, offers and even gift cards, not to mention loyalty cards Users searching for specific deals will be pointed to a place of business on a Google map. Google will also be promoting a daily Google Offer, the Google equivalent to Groupon or Living Social.


Google Wallet will connect online and offline commerce, and will make online promotion for local retail businesses MUCH easier. Google Wallet and Google Offers will make it one step easier to reach potential customers. Things like loyalty cards will be more effective if customers aren’t deterred by having to keep track of dozens of cards in their wallet, or needing to print out coupons.


Google Wallet will also boost paid search advertising efforts for retail businesses, with or without an e-commerce site. Plus, since all coupons will be available electronically I would expect a new range of reporting metrics available to advertisers in Analytics from Google Wallet purchases. Tracking the date your coupon was downloaded from your ad and looking at the amount of time it took someone to actually redeem it, for example, could help you craft ads with stronger CTAs. And knowing how many people have used your coupon beyond clicking on your ad would be good general information to gauge the effectiveness of your marketing as well.


What the Google Wallet is trying to do is make e-eommerce not just a process of buying products/services online via a website, but rather as a tool to make purchases anywhere, and most importantly to bring the convenient aspects of online shopping (searchability, electronic coupons/payment) to your business offline.



JR

Tuesday, May 24, 2011

Direct Merchant Account or PayPal?

Today I was asked “are your rates better then paypal” and I gave two answers.

1. Yes

2. PayPal and a direct merchant account are two very different things.

I am sure you can find tons of articles on the internet about PayPal Vs Merchant Accounts, but I would like to give you my perspective. I think PayPal is great, I think there is definitely a purpose for PayPal. I strongly believe that Paypal is a great service for startup online companies, companies on a low budget that just need something to get up quick. However, if you are looking to do any serious volume, or if you are looking for something with flexibility, or if you are looking to do anything in what would be considered a high risk area, you need a direct merchant account.

What may make PayPal attractive, is first the cost. Its reasonably cheap, no setup fees, gatway fees, monthly fees, etc. With PayPal you are not really getting a merchant account, you are using their merchant account.

When it comes to getting your money, a direct merchant account may take longer, or shorter, it really depends. BUT the credit card payment system is one that has been around for over 40 years. Its trusted the world over. PayPal is a private company that in the grand internet scheme of things has been around for a while, but not as long. Also, if you do some google searches you will read stories from people around the world who have had their funds frozen by PayPal, for one reason or another. I am sure in a lot of these cases, there was a very valid reason to do this. However, I would also assume that it happened to a few people that didn’t deserve it. Just something you need to keep in mind.

Fraud protection is also something that every merchant really needs to take into consideration. With a direct merchant account/payment gateway, you will usually access to customizable solutions for Fraud protection. And you can base your settings on your business type and the history, its your choice. However, with PayPal, they have total control over fraud detection as its their merchant account that you are using. So, you may have instances where transactions are being declined that shouldn’t be.

Although the upfront costs are more, a direct merchant account/gateway allows the flexibility needed to make it easier for both the customer and merchant. For the customer, ease-of-use translates into more sales. For the storeowner, ease-of-use and automation translate into time (and therefore money) saved.

Overall, PayPal is an excellent payment solution for a business on a low budget that wants to get up and running quickly and easily. But a direct merchant account is a extremely flexible payment solution that will grow as your business grows. In the short term it will cost more to get up and running but in the end it's always worth it.

If you are looking to setup a direct merchant account or have any questions about this article, please contact me



JR

Thursday, May 19, 2011

Offshore Processing for Internet Marketers

When I speak to a lot of internet marketers and bring up the option of processing business offshore, I am told (in a lot of cases) that they are not interested in offshore and they only want a domestic solution.

I am actually not 100% sure of the reason but one thing is for sure, offshore processing has much worse reputation in the Internet Marketing industry then it should. A lot of the time setting up offshore is exactly what a merchant needs to do, at least for the time being. One of the major benefits to processing offshore is that it provides you with much-needed flexibility and can really help if you are having any chargeback issues. I would be happy to speak in much greater detail with anyone that is interested. Contact me anytime.

The fact of the matter is, the offshore banks that I have worked with are all established, have a very good understanding of ecommerce, and are very easy to deal with it. If the image that you have of working with an offshore bank is that of a shady organization, operating out of a small office, in the middle of some backwards country, then you are wrong. I have seen some of the operations, and they are impressive to say the least. They are banks, they are regulated by the associations they belong to, and a lot of them understand ecommerce better than domestic banks.

What I sometimes suggest to my merchants (especially those in the online marketing space) is that they should have both domestic and offshore processing and once they setup, it’s easy to understand why. Yes, you will pay slightly more for offshore processing, but would rather pay a slightly higher premium to ensure that you are always up and running, even if you encounter some slight chargeback issues.

And lets be honest here, even if you run a 100% complaint operation, if you are running any type of trial offer you will have customers that forget to cancel, will complain and you will get Chargeback - and the difference between offshore and domestic chargeback thresholds is significant. This is a HUGE advantage of going offshore and I think it’s a better option than the IPSP model.

One concern that a company may have with going offshore is the requirements to incorporate in that jurisdiction. That is understandable if its something that you have never done before, but it’s really not a complicated process and it’s a process that any processor with experience can walk you through. There may be some slight additional costs, but the benefit of ensuring your processing is up always definitely outweighs that. Contact me if you have any questions about setting up an offshore account.

I think that getting comfortable with Offshore is something that comes with experience. I do have quite a few merchants/offers processing offshore, and I think that these days anyone with substantial volume that offers a trial is starting to see this requirement. Adult merchants have been processing offshore forever, and they definitely see the value in it BUT its important to note that you need to work with someone that has experience because you don’t want to get burned, have the bank blow up and hold your funds.

Some quick benefits

- Usually allow for more volume/no cap
- Higher chargeback threshold
- Potential for multiple currencies
- Higher chance for approval.

If you have questions about Offshore Processing, or would like to talk to me about setting up an account then get in touch.

JR

Friday, May 13, 2011

Direct Merchant Account VS IPSP/Third Party

Recently I read a post on directreponse.net (http://bit.ly/kUQ7fO) that discusses Limelights integration with CCBIll. I am a huge fan of this blog, I look forward to reading the posts and I know that Rich is clearly a person that knows a lot about this industry. That being said, there are some things that I don’t agree with and I think that every marketer should be aware of.

I think the move by Rick at LimeLight to integrate with CCBILL is a great one and I think a lot of merchants will use this service, however there are some important things to note and this based on feedback I have received from merchants who are working with CCBILL or other similar models.

1. This post clearly is against Offshore merchant accounts. I am really not sure why that is. I have boarded a lot of merchants offshore and they are running great. The pricing is a bit higher, settlement timelines are slightly longer (for the most part) but there are a lot of advantages to going offshore. I will get to those in another post because that is a whole discussion in itself.

2. For this IPSP Model, the rates are very high…with reserve and everything involved it can get really up there. This money can be spent on other way to grow your business, not processing. I understand that its an ”all in” solution but you are definitely paying a premium for it.


3. “their compliance team might as well be the FTC themselves” This is a direct quote from someone I know who is working with them. Because CCBILL is basically the merchant of record, their ass is really on the line. I don’t blame then, I would do the exact same and I am not advocating non compliance, but when changes need to take place for whatever reason (especially increasing conversions) you don’t want it to be a lengthy process. This leads me to my next point.

4. If you want to change something, it needs to go through an approval process. I understand that...and I definitely don’t blame this, but it’s a reason why this type of account isn’t for everyone.

5. “They host everything and integration is not easy” I have never integrated with them, so I can’t comment, but this is another complaint someone gave me.

A lot of things above are seen as positives and beneficial to the merchants, but I really believe that Offshore is definitely a viable option and you have more flexibility with a direct merchant account.

CCBILL is doing something right, they have been around forever, were /are leaders in Adult processing, but I want to present alternatives as their solution will not work for all large advertisers. As the online marketing space grows, its good for people to know there are options.

If anyone is interested in knowing more about a direct merchant account, offshore or domestic, I would be more than happy to discuss what is available.
After reading this post, its more about negatives towards the IPSP model, then positives for a direct merchant account. I will write one shortly that focuses on the positives.

JR

Wednesday, May 11, 2011

What is a "High Risk" Merchant Account

Some Merchants in certain categories (but definitely not all) that deal with high volume sales in eCommerce are likely to be designated as “high risk” because they might have a high rate of charge-backs. Chargebacks occur more often when the merchant does not actually see and swipe the credit card. This is why traditional retail merchants are able to avoid a large percentage of them, whereas Internet merchants are not. Further, many of these businesses function within industries with perceived (and I need to stress the word perceived because I work with TONS of merchants that this doesn’t apply to) reputations for low product or service quality, minimal authenticity and order fulfillment failures.

Some merchants who are limited to applying for High Risk Merchant Accounts become frustrated with their limited options and wonder if they will ever be able to apply for a Low Risk Merchant Account. The reality is that if your industry is well established as a high risk category, you will likely require a High Risk Merchant Account for the life of your business. If, on the other hand, your credit history and business practices are the reason for your high risk designation; you may be able to make some reasonable changes and qualify for a Low Risk Merchant Account in the future.


High Risk Merchant Accounts include:

Merchants with Bad Credit or TMF
Subscription services - Multi level marketing - Psychics/Fortune Tellers
Direct telemarketing - Travel - Vitamin/Herbal supplements
Membership services - Tickets - High volume Merchant Acccts
Adult websites - Dating sites - Telecom
Online pharmacy - Timeshares - Mail Order/Membership Clubs

So, are there still good solutions for Higher Risk Merchants? Absolutely! Just because you are conducting business is one of this higher risk categories doesn’t mean you will not be able to get an account. Work with processors, (like myself :))who have experience in this area and understand the business. We can probably help you implement strategies for chargeback reduction.

While its true that the majority of high risk accounts will be placed offshore, we can definitely look at the business and see if domestic is an option.
If you have any questions regarding High Risk accounts, don’t hesitate to contact me.

JR

Are Daily Deal websites considered high risk?

Daily Deal websites are something I know quite a bit about as I work with some of the largest Daily Deal websites around. These guys process a significant amount of volume and quite honestly the chargebacks are extremely low considering the volume. So the question is, why in speaking to some companies, do they tell them that domestic processors are not willing or want to their business because it’s too high risk?

A few answers to this question.
1. They don’t understand it.
About 1 year ago, when the larger sites were just starting out, this may have been a good answer and a few of my clients had to really sit down with processors and explain the concept. If you get this answer from a processor today, then they shouldn’t be in this business. Anyone who doesn’t understand this business has been living under a rock.

2. There is a fear of high chargebacks from customers who aren’t happy with service they received.
If that is the case, then this is not a merchant that I would want to work with either. The Daily Deal websites that will succeed are the ones who place an emphasis on customer service. If a customer is not happy, then refund them. You would rather have that customer come back and be happy with the service they received, then not and of course you don’t want the chargebacks.

3. The merchant can go out of business after they sold all the deals.This is a risk that you have to take, but all these larger deal companies do their due diligence on the merchants to see if they can handle the huge influx of customers they are going to receive. I wouldn’t want to work with a deal company that will just take anyone, I will want to see their contract and how they board the merchants.

I do not in any way consider a daily deal sites high risk, as long as the people behind them are in it for the long term and are looking to build a sustainable business. Right now we are placing daily deal sites domestically at GREAT rates both in Canada in the US. For some of the larger sites we have merchant accounts at both a Canadian and US bank, and NO ISSUES AT ALL!

I strongly believe that the top guys will stay the top guys but there will be smaller sites that focus niche industries, which is definitely something we are seeing now.

As always, I am here to help if you are looking to place this business. Hit me up


JR

Who is Jared Ronski?

My name is Jared Ronski, and you are probably asking yourself why does this guy have a blog and why am I reading it.

Well to give you some background on who I am, I have been in the payments industry for over 7 years in various capacities. I started off working in prepaid, helping companies disburse funds around the world. I worked with MLM companies, companies paying affiliates, and gaming companies just to name a few.

After prepaid, I got into the payment processing business - helping merchants accept payments (primarily credit cards) online. I work with both Low Risk merchants as well as High Risk merchants. The typical merchant I enjoy working with the most is the high volume, experienced, internet marketer. I find that its fun, interesting and its an area that I really enjoy.

The purpose of this blog is to really discuss the issues facing internet marketers, talk about strategies to overcome them, look at what is working and what isn't , and hopefully I can help people along the way.

Any feedback to the site is greatly appreciated, and I look forward to speaking to anyone who would like to know more about what I do.

thank you,

Jared