Different types of businesses require different modes of payment. The right choice of payment option that compliments your business should be based on two important variables; first being the type of business you operate and two being the kind of demographic you cater to and want to attract.
A merchant account is a mandatory requirement in order to accept credit or debit cards. And obtaining one might be quite easy if you are a regular business but just getting one should not be your priority. Instead, finding the right merchant account provider that suits your business operations and goals and offers you the services that will help you run your payment process efficiently is of utmost importance.
This is especially important in case of high risk businesses who struggle to find merchant solutions and end up compromising on the quality of services they receive. One such industry that has trouble dealing with banks is the subscription or membership based businesses.
Businesses with products and services like magazines, cosmetics, spas, lifestyle, healthcare, clubs, fashion etc that are consumed on the regular basis come under this particular industry.
Challenges for Subscription- or Membership-based businesses:
The most common reason why merchants with recurring business models are often denied a merchant account is due to the higher risk of chargebacks. There are many scenarios with such businesses wherein the customers forget that they’ve signed up for services.
There is also a greater possibility of friendly frauds occurring with subscription based businesses with customers denying having signed up for services or authorizing for recurring payments and then calling up the bank to revoke their entire plans. Such instances hurt the business and increases their chargeback significantly.
Hence, it always advisable to disclose clear terms and conditions about your refund policies and payment terms during the check-out process.
Subscription- or Membership-based Merchant Account Solutions:
If you are one those businesses offering subscription or membership options to your customers, you should opt for a merchant account that will give you the ability to accept recurring payments easily and quickly and ultimately streamline your payment process efficiently. Such businesses have a specific payment processing needs that can only be fulfilled with Subscription- or Membership-based Merchant Account Services.
With a subscription- or membership-based merchant account, a customer need not enter their payment details every time. Plus, you don’t have to remind your customers for payments either since you can receive regular on-time payments automatically. You also have the freedom to choose when your customers will be charged i.e. daily, weekly, monthly, yearly, etc.
Such type of merchant account has extensive customizable recurring billing options for the kind of products and services you sell that will the demands of your business as well as customers.