Why PayPal is BAD news for Merchants

Aug 29, 2014
bad newsIf you have any inkling that your business can be categorized as high risk, it is in your best interest to avoid PayPal at all costs and apply for a high risk merchant account with a processor that specializes in the industry. PayPal can look attractive because of no set up fees and the ease of opening an account, but like other things in life, if it is seems to be too good to be true, there is a problem.

One of the biggest complaints about PayPal is their holding funds and taking such a long time to get them deposited into your checking account. With a traditional high risk merchant account, your money could be in your account the next business day. When requesting funds from your PayPal account, they clearly state that the transfer could take up to five days. This is unacceptable for a business which is relying on turning inventory in order to purchase more. Without a good, dependable cash flow, it is hard to run a business.

If you are in such industries as online adult dating or adult products, online firearms sales, nutraceuticals , penny auctions, online ticket broker, credit repair and many others, do not pass GO and do not collect your $200. Run, do not walk, away from PayPal. PayPal was designed to protect the buyer since it was introduced by eBay. However, even some buyers have complaints.  The very bad news for a high risk merchant is the PayPal shoots first and asks questions later. Your sales may be completely valid and above board. However, if PayPal’s risk department even thinks there may be some fraudulent sales due to chargebacks, they will freeze your account or shut it down and the money you have earned can be tied up for ages.

Another huge complaint about PayPal is its lack of customer service, or in many cases customer non-service. Phone reps are not well-trained and if you can speak to a live person they may not understand your question and really do not have any answers. When a retailer or service provider has a high risk merchant account, he or she wants answers right now. And everyone wants the correct answer. It may not be what you wanted to hear, but it will be the correct answer.

Plus, do not be fooled by their open rate of 2.9% plus $.30 per transaction. For a traditional merchant account, this is high. For a high risk merchant account it does not matter if it is high or low if you run the risk of never seeing your money.

If you are in one of the high risk categories, your best choice it to stick with a credit card processor that specializes in high risk merchant accounts. Generally, there are no application fees and no set up fees. You are not required to have your own Visa and MasterCard registration. Accounts can be approved for those who have credit ratings of 500 and lower. If you keep your charge backs under the 3% threshold, you have smooth sailing.

To get approved for a high-risk adult merchant account from eMerchantBroker in as little as 48 hours contact us 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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