Infomercial Merchant Account
Infomercial Merchant
Infomercial merchant accounts are usually categorized as high risk. The infomercial industry is a high risk industry for a number of factors. The industry is similar to an inbound telemarketing business. The selling strategy pushes customers into a sale that usually has higher than normal customer complaints. Some infomercials sell on a recurring billing method which keeps charging customers month after month. Up selling is another method that bundles infomercial merchant accounts into high risk. These tactics create higher than normal customer complaints which lead to more bank reversals and chargebacks. Many of these merchants will only be able to make sales using a high risk merchant account. Many banks will consider providing the merchant with a medium risk merchant account after the business is able to provide at least 6 months of sound financial history as well as 6 months of clean payment processing history.
Infomercial merchants have been accustomed to having to process through a high risk merchant account. Infomercial payment processors will require the business to agree to a 10% rolling reserve as well as a slightly higher rate in order to cover the increased risk the processor is accepting. Many startup infomercial businesses will not have many options when it comes to being setup with an infomercial merchant account. Most banks and payment processors do not want to deal with a new business in the high risk arena. This is mainly because there is no proven track record for the company. They do not know what the monthly volume will be and if the merchant is able to handle customers and their chargebacks correctly. Banks would rather have a business with a track history processing with them than a start up.
High risk merchant accounts are required for many businesses that have higher than normal fraud instances but mainly any business that has higher chargebacks compared with a normal brick and mortar business. High risk merchant accounts have become popular due to the increase in ecommerce and non face to face businesses. These businesses have a business model that puts a higher risk upon the banks and payment processors that are processing payments. The business models are usually designed for higher sales and higher profits because they are more aggressive that most other business models. The product is only one factor for determining a high risk business. The customer base that is being targeted and the selling tactics that are being used are factors for why their sales are high risk.
Offshore Merchants has been setting up high risk infomercials since 2007 and is determined to setting up businesses with the best solutions with the best pricing available. Merchants must work with a payment processor that is going to allow them to process transactions in real time while receiving payouts on time. These are two very important factors that separate good high risk payment processors from payment processors that often become blacklisted. Research the payment processor you are planning on using before you begin working with them.
Contact one of our helpful account representatives to assist you in the setup of a high risk merchant account or offshore merchant account for a high risk merchant.