October, 2018 | IBS Payment Solutions

How to Obtain Online Dating Merchant Account Services?

In the digital era, looking for your soul mate is as easy as shopping for your favorite clothes.

This billion dollar industry which has popular dating platforms like Tinder is one of the most prominent digital industries in the world. With the introduction of apps and wide variety of highly specific niche websites, the online dating industry has only experienced massive growth in the recent years.

The primary service medium of dating merchants is online websites and apps which make it absolutely essential to find a reliable and secure way of accepting credit or debit cards online.

Even after proving to be a lucrative business, merchants have to struggle with obtaining merchant services from financial institutions. The lack of regular merchant account services available for online dating websites is because of being classified as ‘High Risk’.

Why do I need a High Risk Merchant Account for my Online Dating Website?

Banks maintain a list of industries that they consider high risk. Adult Industry, Gambling, Nutraceuticals, Cannabis and such are included in this category. The factors that determine their risky nature is industry specific. Let’s look at the main reasons why your online dating business is considered high risk:

The online dating business is a niche industry which falls under the Adult Industry umbrella which automatically makes it high risk.
Nature of Business: Some of the websites or apps are not exactly family-friendly. They showcase indecent or vulgar content not suitable for all ages.
Business Model: Dating Websites and Apps usually offer free trial with monthly payments to follow. It is a risky business in the sense that it has to rely on monthly payments, if the customer opts for it, after the free trial period ends. It can lose customers quickly.
Subscription based models also means abrupt cancellations and refunds leading to chargebacks.
Fraudulent businesses like escort services or prostitution websites disguised as online dating websites are common with this industry.
Unsatisfied Customers: Merchants have to frequently deal with customers that do not find their match or suitors and then file for chargebacks claiming that the merchant failed to deliver what they subscribed for.
Image Issue: For approval, merchant providers’ acquiring banks should allow dating sites in their underwriting guidelines. But for many global banks, it is against their policy to approve adult or any other related niche business such as online dating. Reputation risk being a major concern.

Online Credit Card Processing for Dating Sites

If you happen to be an owner looking to obtain merchant account services, you may have stumbled across various processors luring you in with tempting offers. Some of these providers take advantage and charge high transaction fees or hidden costs. As such, you need to be cautious and ask relevant questions before agreeing to anything.

There are banks that have a conservative approach towards this niche industry and charge exorbitant fees for regular merchant services.

If you are thinking about registering with payment processors like Paypal, Square or Stripe, you will be disappointed to know that these processors do not accept such high risk businesses.

Fortunately, there are several excellent merchant account providers that are not hesitant to serve dating merchants and also offer custom high risk merchant account solutions for dating websites.

Since acquiring banks choose not to be directly involved with an online dating business, merchant account providers with strong banking relationships prove to be significant in taking such merchants onboard and increase chances of approval.

For a secure payment gateway, you can ask your merchant account provider to integrate a payment gateway that is compatible with your website.

For dating websites catering to global audiences, different modes of payment processing and multiple currency processing services is what you should look for in a potential merchant account provider.

High Risk Merchant Account Services are available for every niche within the online dating industry. Start processing now!

High Risk Payment Solutions: E-Cigarette & Vape Merchant Account

Electronic cigarette has proven to be an excellent alternative to traditional cigarette.

Chinese pharmacist Hon Lik first commercially launched e-cigarette in 2003 with the brand name Ruyan. Since then the industry has only grown in leaps and bounds and is currently valued at more than $3.5 billion. The popularity of e-juices, hookahs and vaporizes has only further enabled the industry.

Millions have found a healthy alternative with E-cigarette and Vaping. With the explosive consumption of these alternatives, retail markets and online businesses have come up and become almost mainstream. With even big tobacco firms joining to make profit of off this blooming and dynamic industry.

As with every business, demand should be met with supply. And supply, not just in terms of products or services but also in terms of customer payment preferences.

The need for merchant services and online credit card processing will only grow exponentially with the growth in the industry.

Why is E-Cigarettes a risky business?

Since it is a relatively new industry, debate on whether e-cig is safe for health since the research done regarding the same is limited.
Changing policies- Legislators introducing new rules or changing existing policies that could affect selling as well as buying the products either way.
The existing industry regulations are quite stringent wherein banks should strictly ensure that those are applied to e-cig businesses during the reviewing process. Which means extra procedure & precaution taken on behalf of the bank that banks do not want to offer.
Undecided regulations on packaging and sale of e-fluids
The industry also has a lot more political involvment making processors wary.
Age Regulations- There are serious concerns over sale of e-cigs to minors.
Just like every other high risk business, E-Cigarette industry is also prone to high chargebacks. Customer unsatisfaction, denying product order or delay in delivery are a few causes resulting in chargebacks.

Financial institutions see the uncertainty surrounding the industry & its pending regulatory status will result in potentially high chargeback rates, frauds and other risks.

Obtain High Risk Merchant Account Solutions for E-Cigarette Business

Offering merchant account services would be a policy violation for most banks and processers.

But with an expanding industry that is in its top form, there are certainly a lot more merchant account providers welcoming e-cig merchants with open arms since its inception.

Merchant Account Services are not just limited to e-commerce businesses but also retails stores selling E-Cigarettes and related products, with processors offering Point-of-Sale (POS) systems and Virtual Terminals.

Businesses also need to understand that some merchant account providers will impose certain limitations like a specific monthly volume processing cap or rolling reserves due its risky nature. They are the risk mitigation tools used by providers to manage potential credit risks.

But over time, with healthy & stable processing history, low chargebacks and positive relationship with the merchant account provider, a merchant can negotiate on those points.

Businesses that are offered High Risk Merchant Account Solutions:

Online & brick-and-mortar electronic cigarettes business,
Vape stores,
Hookahs parlours,
Cigars and other related accessories

Find a merchant match for your business and book a consultation soon!

Why Do I Need A High Risk Merchant Account For Fantasy Sports?

Millions of young die-hard sports enthusiasts are hooked to fantasy sports. Baseball, Football, Hockey, Cricket, Soccer being the most popular fantasy sports websites.

What better way to make yourself a part of a sport you absolutely love? It only gets better with your friends and family joining in the virtual game.

This recreation sport may have only begun as a means of fun among friends but is now a booming billion dollar global industry. Billions of dollars are being invested in virtual game platform across various sports pursuits and last checked, the industry is generated $7.22 billion revenue according to a research conducted by Ipsos Marketing.

Fantasy sports are played both on a desktop as well as on smart phones. With a demographic consisting of largely young players, the use of mobile phones to play the game has increased significantly in the past years. Online platforms being the primary source of fantasy sports, it becomes vital to provide online credit card processing services to its participants.

Although with the industry being categorized as high risk, obtaining regular merchant services for credit card processing is an uphill task for fantasy sports merchants.

Why is Fantasy Sports considered as a High Risk Industry?

Despite being a flourishing money making industry, financial institutions refuse to engage with these merchants and are quick to decline their applications.

Fantasy sports business is also known as the most popular type of virtual sports betting. With the games being largely viewed as form of gambling, its nature of business becomes controversial and hence placed under the high risk bracket by banks.
Another major issue being the industry is plagued with customer-initiated chargebacks due to its high ticket price.
Recurring billing or subscription-based billing results in a lot of cancellations and refunds.
As with games, there are winners and losers. While some are a good sport about being on a losing team, merchants also encounter a significant percentage of defeated players who file fraudulent chargebacks after losing to avoid paying.
Betting is a greedy game. In an attempt in rack in more, players end up with a huge bill and then try to cheat the chargeback system to play for free. This is called friendly frauds.
With the industry being heavily regulated, ensuring strict compliance of rules by merchants puts tremendous burden on the underwriting team processing the application.
Sponsor banks follow a strict policy against high chargeback ratio. If a merchant’s chargeback exceeds a certain limit, the bank is quick to shut down the account as well as charge the processor a heavy fine.
When chargebacks go unpaid by the merchants, it causes a huge financial risk to banks and credit card processors making them extremely cautious about accepting businesses with a possibility of high chargebacks.
The payment methods that fantasy sports merchants heavily rely on are online, virtual terminals or MOTO which are susceptible to fraud.
Excessive liability coupled with uncertainty makes it a high risk industry.

How do I obtain a High Risk Merchant Account for Fantasy Sports Business

You have your fantasy sports website up and running but no way to accept payments since you have discovered that the industry you operate in is considered high risk. What are your options now?

Instead of running pillar to post searching for a decent bank or credit card processor to take on your business or getting accepted and later having your account frozen during the reviewing process by online payment aggregators like PayPal or Stripe, start seeking reliable merchant account providers offering high risk merchant account solutions.

Now, you may have a long list of providers to offer their services but it is important to scope out and pick one who knows the ins and outs about fantasy sports business and have experience with the industry at large. Those being familiar with the nuances of the industry certainly help during the underwriting process of your business. Processors with a long-standing relationship with their sponsoring banks are an additional advantage.

When determining risk, an underwriter will study various factors and seek reassurance that the processor will not be saddled with the responsibility of clearing chargebacks caused by the merchants. High chargebacks and faulty business with questionable practices is the recipe for quick merchant account denial.

Reputable, law-abiding and a smooth functioning website with regular updates are the basics required from a merchant’s end for a smooth merchant account approval process.