Research Findings – Applying For Merchant Account To Accept Debit / Credit Cards Online – Challenges, Conclusions and Solutions for International Sellers
How hard is it to set up an online store and start accepting payment by debit or credit card? Not everybody has PayPal but a lot of people have a VISA or MasterCard card which they use to buy at shops. Cards can also be used to buy online, so if you intend to sell your products online or make use of a dropshipping supplier, then you need a method to accept credit cards online. As it turns out, it’s not easy to get an online merchant account these days, especially if the company is not a Send-Money service like PayPal or Skrill. Requirements have changed and they are becoming tougher, making it hard for a newly established business to operate online. There are a lot of knockoffs and copycats among service providers, most of who are only looking to make a quick buck from recruiting established businesses. These companies are largely not creative, so in order to stay in business they are targeting established merchants. There are a few exceptional providers such as Stripe, SquareUp, Braintree and Zombaio who are providing innovative and creative solutions to make selling online easier for everyone.
To get an idea of how hard it is to get approved for an online merchant account these days, here are the results of my research:
ACTIONS
Applied for ecommerce merchant account for debit/credit card payment processing.
Applied for high risk merchant account for adult payment processing.
FINDINGS
Processors with low-barrier entry such as CCBill accept international merchants from all countries but they charge an exorbitant annual fee for card processing and account maintenance, for example CCBill charges $500 a year to maintain a merchant account. Some charge a monthly fee but you may still be required to submit personal documents.
Processors with high-barrier entry such as Bluesnap and 2Checkout accept international sellers from over 180 countries but they require a lot of documentary proof and high sales volume. However, there are no subscription fees. The companies charge transaction fees only when you generate a sale, there are no account maintenance fees.
There are ecommerce solutions like Shopify, Oberlo, AliDropship, Ordoro and WholeSale2B, which charge a monthly fee for a dropshipping or seller account, but they don’t process payment. Payment processing is done through third party payment gateways which are integrated with your seller account, for example Shopify supports over 200 payment gateways such as PayPal, 2Checkout, Stripe, AuthorizeNet, Skrill, Worldpay, ePay and NetBilling etc. Ecommerce solutions like Shopify provide you with order processing, account management and sales tracking features, but not payment processing. They also provide value in that you are given access to a wide choice of suppliers and products. Solutions like Oberlo allow automatic order processing with any supplier in the network, making dropshipping smooth. Sellers are able to install selected products at the click of a button. The monthly costs for using these ecommerce platforms include hosting your store, order processing, dropshipping, sales tracking and other features. Depending on the platform, you may be charged for sales minimum but a seller is usually given options and plans to choose from. For example, Oberlo provides a free plan for sellers with less than 50 orders per month. For more than 50 orders a month, you are required to upgrade to a paid plan.
There are eCommerce solutions for startups and those who are launching a new store. In this case, merchant account providers like Stripe, Braintree and SquareUp provide both order processing and payment processing for the merchant account. They don’t need the client’s sales history and documents to get started. You can set up your store and start selling immediately.
There are exceptional high risk merchant account providers such as Zombaio. Zombaio is an example of an Adult payment processor with low-barrier entry. Your account will be approved instantly as long as your site is compliant with their requirements. For example, escort services are not permitted on an adult site using Zombaio. Content sites and webcam sites are accepted.
CONCLUSIONS
It’s hard to get approved for a payment processing merchant account if you don’t have previous sales records, US bank account, if you stay in unsupported countries and if you don’t meet minimum sales volumes.
Most payment processors require scanned documents to verify your status – ID, company registration, tax certificates, bank account statements and sales proof.
Most payment processors will only approve established stores and businesses that are already making sales. They don’t support new start-ups and businesses with no sales records. The motivation is profit – established stores are more likely to generate sales instantly, so the payment processor will start earning fees immediately.
Some payment processing companies give accounts to local merchants only e.g. FastPay and SagePay are only available for South African merchants.
Some payment processing providers specialize in selected regions and countries, for example Stripe and SquareUp supports startups in the USA, Canada, Australia, UK, Europe and a few Asian countries such as Singapore and Malaysia.
SOLUTIONS
In order for you to start selling online, you can wait for merchant account providers to change their requirements or you can look for a solution that allows you to sell products online and get paid straight to your account. In this case, the company will send payment from sales straight to your bank account via Wire Transfer, Check, Payoneer or PayPal.
These solutions include:
Affiliate marketing
CPA marketing:
Pay per sale – RevShare, Commissions based on generated sales. Earn percentage of sale or subscription.
Pay per lead – pay per sign up, pay per install, pay per demo, pay per trial, pay per download.
White Label affiliate marketing – The supplier provides you with an online store with a custom domain name prefilled with company products, ready for sale. All you need to do is start promoting your store. The store owner and white label provider share profits from sales. You can even set your own prices. Sales are received into the supplier’s account so you don’t need to process payments with your own payment gateway. The supplier will send payment straight to your bank account via wire transfer, check, PayPal or Payoneer account. There are dating sites which promote their services through white label affiliate marketing, but other suppliers such as fashion and jewellery stores are also beginning to adopt white label marketing.
White Label means you are able to sell the products using your own brand name. The supplier’s name will not appear on your website, store and invoice. You will not be required to use the supplier’s telephone, email and other contact details. Also, the supplier will ship the products in your name. This will protect your business and brand. The affiliate will have their own contact details for selling, shipping and customer service.
