7 Figure Merchant Accounts (and beyond)

Feb 18, 2017

How High Volume Merchant Accounts Are Different & What You Need To Know

If your online business generates seven figures a year, you could be exposed and not even realize it.
You don’t need to be in a “high risk” industry to be at risk.  Simply doing 7 figures a year raises the risk flag.

From increases in volume, to new regulations in specific industries ( the Vape and supplement markets to name a couple), business owners can face challenges that seem to pop up out of nowhere. These things can expose your company to the risks of having your merchant account shut down.

It’s difficult to keep up with all the dos and don’ts of running an online business.

If your company is new to the seven figure club, you have to take precautions you haven’t needed to in the past.
You’re at risk because:

  • You’re on the radar now
    • When a company approaches 7 figures a year, banks take notice.
    • Visa, Mastercard, Discover & Amex all mandate higher scrutiny of 7 figure businesses.
      As such, ALL banks, credit card processing companies, and underwriters require more in depth risk assessment of the entrepreneurs they work with.
      That threshold varies from credit card processor to credit card processor, but is usually at around 50-80k per month in sales.
  • Fees suddenly matter much more than they used to
    • When you’re bringing in 10k a month in sales, .3% may not seem like a big deal.
      But when you’re producing 100k a month, all of a sudden that .3%
      pays for a chunk of an employee’s salary

Are you absolutely sure you’re setup the best way?

Once you hit the seven figure mark, there are several things you really must do to protect your business. Just a few of many of these include:

  • Multiple merchant accountsload balancing gateway Easy Pay Direct
  • Utilizing the RIGHT banks for your industry
  • A Load balancing payment gateway to ensure your business can handle all its online traffic

Utilizing those three techniques makes a huge impact and puts you ahead of 80% of your competition.

The 20% or your competitors that are growing like crazy are doing that plus leveraging other tactics and software tools to control higher sales volume, refunds, chargebacks and fraud.

Obviously they haven’t all taken the time to become experts in every nuance of credit card processing. Most have simply found a provider they can trust (who can be the expert for them) to ensure their business is protected.

Now, while those are (just a few of the many) tips meant to encompass all eCommerce companies who have annual sales volume over 7 figures; every niche has it’s own nuances.

We can’t possibly list every industry we have expertise with… But here are a couple niche industries that we help every day – and some life saving tips for setting up high volume merchant accounts (80k+ per month).

Supplements & Nutraceutical Merchant Accounts

If your company focuses on supplements and nutraceuticals, you should avoid Stripe as a payment processor.Many merchants enjoy some initial success selling supplements through Stripe, but once a certain volume is reached;
Stripe’s internal review team opens a “risk review” ticket.Those same merchants will find their accounts closed without explanation, all because supplements are “prohibited products” for Stripe.When your supplement company is small, you fly under the radar. Once you reach around $70k/mo in sales, your supplement company is now on Stripe’s radar.
Nutraceutical FTC Regulations

Additionally, your supplement / nutraceutical businesses should use “conditional” statements at all times.
You can read about what statements you can and can not make in the
FTC’s guide to advertising supplements.

One more quick tip, your supplement businesses should always have the ingredients label present.
Doing so expedites underwriting and can mean the difference between an approval or denial.

Many merchant account declines are due to confusion regarding whether ingredients are “prohibited” or not.
Having the ingredient label present for underwriters not only eliminates ambiguity, but it’s a requirement by most processors.

Vaporizer & eCigarette Merchant Accounts

Vaporizer businesses also have to be extremely careful when passing the seven figure milestone.
Vaporizers are completely banned from Stripe, so if you’re an eCommerce business selling vapes through Stripe, your account will be shut down once you’re noticed.Vape businesses also have to pay attention to age verification.
To comply with legal requirements, websites selling vapes are now required by Visa/Mastercard to have age verification on their website, and most banks are requiring packages to be signed for by adults.
Vape Age Verification Easy Pay Direct Image

On top of that, vapes have been added to Mastercard’s BRAM (Business Risk Assessment and Mitigation) list. This means mandatory registration with Mastercard – or inevitable merchant account closure. (The right merchant account providers can help you facilitate this)

While rules vary from industry to industry, one constant is that not following your industry’s regulations can result in your business being shut down.

Contact us today to set up a free 15 minute consultation and understand if your business is protected.

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