Out of all the components that must come together in order to run a successful business, the mode of accepting payment for services rendered is the most important. Without the ability to accept payments from customers, a business cannot continue to operate. As technologically advanced as the world is today, accepting only cash or checks just won’t cut it.
For many businesses the process of applying for a merchant account is long and complex. There are many steps in the application process, and the smallest of mistakes can cause huge delays. A clear presentation of projected revenue, sources of revenue, and the business model itself will be considered by the bank during the application process.
Unfortunately for many start-up companies, big banks are extremely hesitant to approve their merchant account application, especially if the company is based online. Some types of business models that are considered to be high-risk include online dating or adult entertainment, nutritional supplement sales, travel agencies, and social networking applications.
The reason banks are hesitant to approve merchant accounts for online-based businesses are because they are terrified of the almighty charge-back. A charge-back occurs when a customer is billed for a product or service, then later calls the bank and requests the charges be reversed. This could happen for various reasons, but it is the most undesirable outcome. Even if a business is approved for a traditional merchant account, their assets and account can be frozen or even canceled by the bank at any given time due to charge-backs.
Alternatives to merchant accounts do exist, but they are scarce, and often customers are leery of doing business with a company that isn’t able to accept credit or debit cards. So what is a business to do in order to get set up for accepting payments? One option is to apply for a merchant account with a company like Royal Merchant Capital. Companies like this specialize in working with what are considered to be high-risk accounts and can fulfill the needs for a wide variety of businesses at a reasonable rate.
Considering an alternative to a traditional merchant account can be a viable solution for anyone who would like to Start Processing Now! Having the ability to accept all major forms of credit cards can ultimately lead to higher revenue for all types of businesses from small start-ups to established online retailers.