Despite Pandemic, Some Businesses See an Increase in Sales

May 14, 2020

Businesses with a high risk merchant account can still be profitable if they pivot their business.

The Covid-19 pandemic has greatly disrupted the US economy as many businesses were forced to close due to strict social distancing measures. The hardest hit were the small businesses where some had to temporarily halt operations, while others tragically had to close their doors for good. 

Despite the uncertain landscape, there is a silver lining. A survey was conducted among just over 350 small businesses covering different industries and localities.  The consulting firm, The Strawhecker Group in partnership with the Electronic Transactions Association, did substantiate what was already a morose reality, yet surprisingly, it also found something surprising.

The Results Are In 

First the bad news.  It was found that almost 40% of small business owners had been forced to temporarily or permanently close their businesses due to the Covid-19 pandemic. Those businesses that have been impacted the greatest include retailers, bars, and restaurants. Other segments that were discovered to be affected were nonprofits and schools.

Now, the good news. Although most businesses have faced a bleak predicament, the survey found that 31% of businesses have actually experienced an increase in sales. With health care providers leading this trend, a total of 66% of medically-connected businesses declared that they had seen higher sales. 

Contactless Payments On The Rise

Another trend that was discovered was that contactless payments, mostly through contactless cards and smartphones, saw a 27% increase.  This coincides with customers exercising extra caution by not handling cash or touching the POS systems while making purchases. So, unsurprisingly, there is now a boom in “card-not-present” commerce.

Card acceptance at terminals for food and beverage businesses has been eliminated by half. However, there has been a double increase in accepting credit cards over the phone as more restaurants are offering take-out and delivery.

For the 24% of small businesses still in operation, they have reported a boost in debit card use. 

Despite the gloomy outlook evidenced by hundreds if not thousands of abandoned shops across the country, there are businesses that are pivoting their business models. Many are adapting their businesses to include options to shop for their products online as well as offering contactless payments. 

Chargebacks And Fraud Never Sleep, Even During A Pandemic

Every major catastrophe has its opportunists, and this Covid-19 pandemic is no different. The pandemic has brought disastrous economic implications as many businesses have shut down, leaving many Americans under or completely unemployed.  Some, in desperation, will be engaging in unsavory activities to earn quickly. 

Nearly 20% of businesses have reported a rise in “attempted fraudulent payments” as well as chargebacks

Jodie Kelley, CEO of ETA, gaver her thoughts on the survey results:

“In times like these, one of our most crucial tools for protecting ourselves and our economy is data, because it helps us understand what is actually happening to small business on a macro level as this pandemic advances.” 

This Too Shall Pass

The Covid-19 pandemic has interrupted every fiber of our everyday lives.  As individuals have had to learn to cope and adjust to a vastly different reality, so have businesses. 

As clearly demonstrated in the survey, there are certain sectors that are thriving more than others. Yet, those that have learned to get creative and adjust their business models to the current landscape have already experienced their financial rewards. 

It is this innovation in times of trouble that gives hope for a better tomorrow.

Let us help you get a high risk merchant account today!

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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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