Negative Option Billing and Forced Continuity Being Shunned by Major Credit Card Companies | What’s Your Plan?

Jun 05, 2017

To start with, Negative Option Billing is a process where a merchant puts a certain product or service on free/subsidized offer so that customers can try the product/service for a small fee before committing to purchase. Before they gain access to the free sample, the merchant will record the customer’s credit card information. After the trial period expires, the customer can choose to purchase the premium product/service or cancel their membership. If a client cancels his/her membership, then the engagement between the customer and the merchant is terminated immediately. However, if the customer fails to cancel the membership, then it is assumed that they would wish to receive the premium product/service. The merchant can then use the previously collected credit card information to process and deliver the product/service to the consumer.

As we move more and more towards cashless transactions, this form of billing is increasingly gaining momentum. This means that businesses, small or big, will soon have to accept credit cards for transactions or risk falling away into obscurity. Yet, amidst the pressure, small businesses find themselves under increased scrutiny from processors who now wield the powers to put them completely out of business with just a click of the mouse.

This chaotic situation where lawlessness and lack of concrete regulations cause parties to fight and hunt each other mercilessly once occurred in the Midwest. Ever since the inception of e-commerce, there has always remained a fear of the same scenario erupting. Issues of fraud, misrepresentation, outright theft from consumers, and get rich quick schemes have been escalating unabated. Yet, for all this time, there have never been any clear regulations to control how business should be conducted on the internet. Chargeback, for example, was never an issue 15 years ago. But today it’s the elephant in the room, costing e-merchants billion of dollars yearly.

In a recent twist of events, credit card companies have started making their rules that will govern future transactions. Surprisingly, the card providers including MasterCard and Visa are against Negative Billing Option and have actually been warning that enrolling customers for “Negative Option” or “continuity programs” would be considered brand damaging. MasterCard, in particular, insists that merchants who engage in such activities will have their merchant accounts terminated with immediate effect. Unknown to them, merchants can now easily get continuity negative billing merchant accounts from companies such as

Sometimes these major payment providers can be so inconsiderate to merchants. Instead of helping merchants, they try to kill them. It’s a relief other players are usually waiting to come in and help.

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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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