Can I use someone else's merchant account to do my transactions?
Unfortunately, this is not aloud. This practice is referred to as credit card laundering and also credit card factoring.
This practice is in direct violation of the contract the merchant has established with the processor for the purpose of running credit card transactions.
When a merchant account is set up there are very specific underwriting guidelines that must be met in order to secure the account. These guidelines include (amongst other requirements) a detailed business description, product and service description, business financial documentation and applicant credit check. All of the requirements are specific to the business and owners that have opened the account.
So, once approved, only that business has the privilege of accepting payment via the account. Further more that business is only aloud to accept payments in the form described on the application. For example, if a retail merchant decides to sell merchandise on a website, they would be required to open another merchant account. The original account was approved for retail card present transactions only.
If you run a transaction on someone else’s merchant account you are jeopardizing that merchants contract, which could result in their account being terminated and their business name included on the Terminated Merchant File (TMF). Once a business has been added to the TMF it is extremely difficult to be removed. Additionally, securing a new merchant account while included on the TMF is next to impossible.
If you would like more information on an affordable merchant account please contact Alex Neir at (800)917-8026 or visit get started with Maxx Merchants Processing-Get Started With Maxx Merchants Procesing.
SMS and Email Marketing combined to increase your repeat business
Most business owners will agree that loyal customers that repeat their purchases are the keystone to long-term success. The reason being, it is far less costly to get an existing customer to buy than it is to find a new one. The lower cost of sales acquisition leads to higher margins and ultimately higher profitability.
How do you increase repeat business?
The short answer is to market to your existing customer base. Traditionally this is accomplished through email and direct mail announcing your latest promotion, special, coupon, etc. Email and direct mail are an effective way to call attention to your business. However, new technology is making it easier for you to keep your brand in front of your customers and make it compelling for them to act.
All-in-one messaging applications such as Maxx Messaging makes it easy for your business to promote a special, an event, a coupon or any offer directly to your customers cell phone, inbox, instant message client or social network. Communication via multiple paths increases the stickiness of your brand and offer.
How does it work?
Use a single web-based software application to push your specific promotion to every popular message channel. One easy, cheap application to keep your customers engaged with your business.
Do you need a high risk merchant account?
Selecting a merchant service provider for your high risk business is an important decision. It is very important to do a little homework on the merchant service provider you would like to use before submitting an application. Most merchants, high risk or not, don’t realize that by submitting multiple applications with many different credit card processors you are actually raising red flags associated with your business.
All merchant service providers (MSP), independent sales offices (ISO), member banks, credit unions, etc, use the same database to research businesses that are looking for credit card processing. If a number of applications for the same business name come into the system all at once, the application is typically rejected before it is even evaluated. Rejection is due to the fact that most underwriters will assume that the business has been shut down by a previous provider, can’t get a new account and are trying every provider possible. This is assumed regardless of the real situation.
What else can be done to increase the chances of an accepted high risk merchant account?
- Be honest about the nature of the products you sell and the services you provide. Full disclosure of your business is necessary to determine the best processor for your industry. Incorrect placement results in a declined account and all declined accounts end up in the master merchant database.
- Make sure that your business terms and conditions are clearly stated on your website check out page. Make sure your customers know what they are purchasing and what to expect if there is a re-bill.
- Offer more than one option for purchasing products and services. Give your customers the option to purchase everything up front in addition to a monthly re-bill.
- Maintain a cash reserve for the business. A large cash reserve demonstrates a healthy business and alleviates the sponsor bank's concerns about the potential for charge back liability.
- Keep your charge backs under 1%. If your charge back ratio (total amount charged back / total volume processed) exceeds 1% it will be very difficult, if not impossible, to get an approved merchant account. If you are able to get approved expect a large rolling reserve to be associated with the account.
- Include your customer service number as part of the line item description of your products on your customer’s credit card statement. This will help decrease chargebacks.
Regardless of your business type, selecting a merchant service provider that understands the high risk merchant account landscape increases your ability to get approved.