The Credit Card Industry’s Money Problem Can Be Your Money Solution | Canadian Merchant Account

Oct 23, 2014

According to Credit Union Magazine, the credit card industry in the United States and Canada is at a crossroads. With profits falling and charge-offs soaring, the industry that once raked in billions must now deal with a society that feeds on credit but does not have the same ability to pay off debt as before. Not only does the credit card industry have to battle recession, but it also must find an effective strategy to join or fight the lure of alternative payment methods.

Long before the lust for profits and plastic supremacy overtook the credit card industry, credit was reserved for only the most responsible bank customers, however, this philosophy only returned modest revenues to banks. Today, even the most irresponsible consumers with poor credit histories can procure a credit card. In fact, banks target young adults with little to no credit histories to offer them credit cards with introductory offers but high interest rates.

Unfortunately, the recent recession has turned the tables on this practice. As consumers became strapped for cash, their credit card use drastically increased, but so did their tendency to not pay their credit card bills. The “Big Three” issuers (Chase, Bank of America, and Citibank) account for more than 63% of all credit card debt, and now the perception of credit cards has turned from an easy source of credit to an interesting trap.

Not only does the credit industry face plummeting consumer confidence, it also has competitors eating away at its customer base. Alternative payment methods like bitcoin and digital wallets have the potential to be friend or foe, depending on how consumers decide to utilize the technologies (banks are hoping consumers charge items purchased with digital wallets instead of using debit). As consumer confidence in plastic wins, it’s important for high risk merchants in the U.S. and Canada to prepare to accept alternative payments or credit card payments. Now your high risk Canadian merchant account can be configured and monitored by alternative payment professionals who know the ins and outs of payment processing.

Contact us to learn more about the benefits of starting a high risk Canadian merchant account with eMerchantBroker

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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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