A Lesson: Internet Merchant Services is Best Done P2P

A Lesson: Internet Merchant Services is Best Done P2P

Recently we wrote about why we prefer connecting with prospective merchants and partners via the telephone to discuss our internet merchant services solutions. Many payment service providers utilize automated application and onboarding systems. Not that we need reminding, but a recent inquiry from a merchant seeking payment solutions enforced our reasoning for having initial conversations to start the onboarding process.

By discussing merchant account possibilities one-on-one, we can accomplish several things:

  • Firstly, whether we even have a solution. Acquiring banks waver on certain industries.
  • If so, whether to furnish the merchant with a domestic, offshore or international merchant account.
  • Critical factors such as country/region registration, volume, processing history and chargeback rate.
  • Finally, whether we’re dealing with a fraudster on the other end of the line. This happens occasionally, and our latest episode is one to remember.

When a business model doesn’t pass the test

Last week we received a call from a ‘domestic’ merchant with a heavy accent claiming to be in the Midwest, seeking internet merchant services for what appeared to be preauthorization services. Contingent upon the business model, we can accommodate these types of merchants.

Our domestic merchant claimed to have a business in which he finds U.S. consumers to purchase and ship items for other consumers, presumably international, without banking privileges or access to credit cards. The U.S. consumer is then compensated by the merchant.

In truth, we didn’t like the idea for several reasons. He was vague about products as well as how he intended to ‘recruit’ U.S. consumers to assist in the purchasing and shipping. We couldn’t help but feel his plan had an unmistakable tinge of fraudulence, so we simply informed him that we didn’t have a solution. There are times we need to go with our gut feeling – we are partnered with acquiring banks are taking on the risk of merchants – thus, we feel we are the bank’s gatekeepers.

This is why we prefer a 5-10 minute introductory conversation with a prospective merchant/business – straightaway, we can decide whether one of our acquiring banking partners can take the business on. Our merchant account representatives have been vetting merchants of all risk levels – mostly high, since we offer e-commerce credit card processing services – since 2001. Have we seen it all? As soon as we think we have, we’ll receive an inquiry with an even more bizarre idea.

We will listen: Some of the more original business models we’ve seen

In addition to the high risk industries du jour – such as CBD, kratom and pharmacies – we receive calls similar to the merchant described above several times each month. However, we also receive them from merchants who present truly innovative ideas.

Sober Transfusions: Two-plus years ago, at a very large trade show in Las Vegas, a merchant approached our stand. He had researched our company, and noted that we were experts in high risk internet merchant services. He was attempting to launch a legitimate business, in which he and his staff made house calls to provide transfusions to help alcohol-impaired people quickly sober up (we joked with him that he was in the correct city for it).

For example, a businessman, in Las Vegas for a trade show, has too much to drink one evening and needs to sober up for an early morning presentation. Sober Transfusion company meets businessman at his hotel room with an IV and necessary fluids. 30 or so minutes later, 90 percent of the alcohol is transfused out of his system, and he’s ready for his presentation.

We thoroughly enjoyed the merchant’s pitch. We really thought he had something, but we declined moving forward with it. We simply think it presented too much risk for any of our acquiring banking partners to assume.

Interstate shipments of wine: This was a tricky one, with regulations differing state to state. Some states allow wine shipping, some require volume limits and others, for lack of a better word, prohibit the shipment of alcohol.

Roughly two years ago, a European gentleman inquired about internet merchant services for his startup online wine delivery business. We were able to match him with a virtual terminal solution from an international bank, though we have yet to get one done in the U.S. It’s a situation similar to online gambling, where every state differs, and navigating state laws is super-challenging.

Need internet merchant services? We’re listening

We think one-on-one conversation in business is diminishing, with various other methods taking over: Live chat, apps such as Slack, and of course e-mail. We’re preferential to a live conversation – it saves time while merchants and internet merchant services providers can get an honest appraisal on one another.

We’d love to hear about your business at 1-800-530-2444. Chances are we have an affordable merchant account solution for you.

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