Using Payment Aggregators can be a Risky Payment Strategy
Using Payment Aggregators is a Risky Payment Strategy: Here’s how to Protect your Cash Flow
Protecting your cash flow is easy! You just need to understand the following:
Merchant Account Providers legally have the ability to hold your money and freeze or close your merchant accounts without notice and without cause.
You Need the Right Payment Strategy
If you’re processing more than $30,000 a month with an aggregator such as Stripe, PayPal or some other merchant account that you set up; you really need to be aware of how important having the right payment strategy is for your business.
The fundamentals are that anybody that buys any product on a credit card gets six months from the final point of delivery to dispute that charge. If the business isn’t around anymore when the customer disputes that charge (meaning that they went out of business) the merchant account provider is responsible for those charges.
Again: When consumers dispute charges and the business isn’t there anymore, the credit card processing company then has to pay for the charge.
This is concerning for Stripe or PayPal, and really for any merchant account provider.
The fundamental difference with something like stripe and PayPal, is that when they open an account. They don’t know who you are, what you do, how you operate what you sell how you sell it, how you deliver it. If you deliver it.
So the only way that they can protect themselves from those pending chargebacks or disputes, is by holding your money or closing your account.
As a business owner, the good thing about them is that you can turn a merchant account on with them right away. So you can start accepting payments with stripe or PayPal really quickly. The downside is that they will also turn off your account right away.
Embrace Underwriting and Work With the Right Providers
The alternate approach is to do underwriting on the front end. You want a merchant account provider that really understands your business model, they get to know you as a business they get to know you as an individual, they also get to know your marketing model and the products that you sell. Underwriting necessarily means you have a lower likelihood of running into an issue later.
Set Up More than One Merchant Account
It’s really important that you work with the right providers because more than likely, depending on your volume, you should have more than one company behind you offering a merchant account.
One of the benefits of Easy Pay Direct is that we facilitate that for you. We want to make sure that you are using merchant accounts that fit your business model and that you have more than one so that you have some control over your own business. If something happens with one of your providers, your business can be steady as ever. Something may happen with another credit card processor somewhere else, or in your processing company they might decide they don’t want to work with your industry anymore. Then through no fault of your own, they can hold your money and close your account. With multiple merchant accounts you can stay up and running and protect your cash flow.
If you’re selling more than $30,000 a month, click the get started button. Give us the basic information about your business, and then we can suggest a payment strategy for your specific business to make sure that you have a fast safe way to accept payments online.
What’s your next step?
If your business has been processing over $250,000 a year, you need to be working with the right banking partners. Let our team of Certified Payment Specialists support you by assessing your current situation.
Do you have the right providers? Do you have enough merchant accounts?
We want to make sure you’re working with providers that understand your model – and that your accounts are structured to protect your cash flow. Just complete our 10-minute application here, or call us at: (800) 805-4949
We are here to make your life easier 🙂