What Are The Challenges Faced By Startup Merchants?

One of the challenges faced by startup merchants is the challenge of opening a merchant account. What are the problems which may occur? Generally speaking, there are three factors that influence the decisions of merchant service companies. Find out the things which a startup business owner needs to keep in mind.

Sometimes merchant applications are rejected due to the low processing volume while the revenue of the merchant service company will not be very significant. Traditionally, the profit margin for merchant services lies within 1% range (off total volume processed) plus the subscription fee.

The location of the business also plays an important role. Merchant service companies do their best to decrease the fraud level; consequently, they very often choose not to work with the merchants who are located in the regions, which are considered to be high risk, for example, India, Pakistan, etc.

The last but not the least important reason is the nature of business. High-risk businesses (such as gambling, porn, technical support, and various types of development services, provided in international outsourcing type of environment) have a high level of chargebacks, and due to this fact, merchant service companies do not want to deal with them.

More detailed explanation of the challenges faced by startup merchants are available for you in the article at #Paylosophy.