Alternative Option To A PayPal Merchant Account

Feb 21, 2018

PayPal and Stripe are tools to handle online payment processing. Are you interested in a PayPal merchant account? Maybe you need a Stripe account for your business? This article will help you figure out when it’s right to use them. Also, you’ll get to know when it’s better to go with traditional merchant account from a payment processor.

Choosing a Stripe/PayPal Merchant Account

PayPal is probably the most popular payments system. Merchants go for it to accept payments, while trying to cut their overhead. However, even though you won’t have to pay a monthly fee, you’re going to end up with much higher rates as compared to most traditional merchant accounts.
It all has to do with the business model PayPal uses. Both PayPal and Stripe don’t offer a single merchant account to a single business. They have one merchant account that they let millions of people use.

As a result, they approve accounts fast and start collecting fees almost immediately. When it comes to business owners, they face fewer challenges when accepting cards. However, the fact that PayPal or Stripe don’t know anything about you or your company puts you in an “interesting” situation. Particularly, as soon as they find anything “unusual” with your account, they freeze your account entirely or hold your money.

Unlike PayPal or Stripe, traditional merchant accounts use a “One-to-One” structure. To open a traditional merchant account, you’ll need to provide details on your specific situation. That’s where the underwriting process steps in. The focus will be on the following points:

  • Your personal history or credit
  • Your business history if you have one
  • Your business model

As a result, the merchant account provider will get to know you and your business as well as the risks associated with your business. This will make it less probable that the provider will shut down your account or hold your funds.

Even if the provider sees something unusual with your account, meaning a rise in volume, an increase if refunds or chargebacks and more, it’ll understand the situation. You’ll have better options to reduce the risk instead of simply ending up with frozen funds or a closed account.

Let alone the fact that your business may be considered high risk. If this is your case, you’ll need to apply to a respectable payment processor specializing in the high risk industry. This way, you’ll be able to open a reliable high risk merchant account quickly and without challenges.

A reputable payment processor like can be ideal for merchant interested in a Stripe or PayPal merchant account. Voted the #1 high risk credit card processing company in the US, EMB offers exceptional merchant services tailored to your specific business wants and needs. EMB’s rates are the lowest possible in the marketplace.

When to Use and When Not to Use PayPal/Stripe

Regardless of the situation, a traditional merchant account provider will be more willing to let your merchant account open than PayPal or Stripe. The reason has to do with underwriting. So, let’s see when it’s preferable to use PayPal or Stripe, and when it’s not.

When to Use PayPal or Stripe

  • If you need a super fast and easy way to set up a merchant account. You’ll be charged a bit higher percentage and transaction fee. You won’t have a monthly fee.
  • If your sales are slow, e.g. under 10.000 per month. In this case, it’ll be less probable that PayPal or Stripe will flag your account.
  • Stripe goes after developers and techier business owners. PayPal is better for smaller businesses, simple integration, and ease of use.

When Not to use PayPal or Stripe

  • If your sales are greater than $100.000, a traditional merchant account will be a better choice for you.
  • If your business is labeled as high risk. The riskier your business is, the higher the chargeback rate is. This isn’t going to work with PayPal or Stripe.

As you see, even if PayPal or Stripe offer an easy way to send and receive payments, they can prove to be challenging for you, as a merchant. Take into account the pros and cons associated with a Stripe/PayPal merchant account and choose the right merchant account provider for your business needs.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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