It’s no secret that multi-level-marketing (MLM) is seen as a risky venture when it comes to merchant accounts. The caution is so extreme that some merchant providers will refuse to offer MLM businesses merchant accounts at all.
It doesn’t matter if the merchant in question has a stellar record with other types of business, or great credit. A MLM merchant account is seen as inherently high-risk by financial institutions due to the amount of fraud typically associated with this kind of business.
Understanding MLM Merchant Accounts
One of the main benefits of an MLM business is that just about anyone who wants to can start one, and you don’t need a fortune to get started. Unfortunately, that structure comes with some drawbacks: scammers and grifters have been exploiting the structure of MLM businesses for years, and most lenders think of it as another term for a pyramid scheme. That’s why it’s pretty tough going out there if you’re an honest MLM business trying to find a merchant account. However, that doesn’t mean it’s impossible.There are some merchant accounts out there that actually specialize in these high-risk accounts. Applying for one is worth serious consideration, because MLM merchant accounts can offer some important benefits.
For example, with high risk accounts like MLM merchant accounts, there is actually a lower risk to termination. If a low-risk business has too many chargebacks, the account might be terminated. But with a high risk account, such as an MLM merchant account, the provider is prepared to deal with this type of situations. They’re prepared to work with MLM businesses as partners. Having chargebacks or fraud isn’t a desirable situation for any business, but wouldn’t you want a merchant account that’s unfazed by it? If you’re in a high-risk sector, you want a merchant account provider who understands. That’s one big benefit to a specialized MLM merchant account.
Another MLM merchant account benefit is better security measures. HIgh risk merchant accounts are cautious, and use tried-and-true detection techniques in every transaction. These merchants are extra wary of fraud and use thorough measures to ensure the card is legitimate. This, in turn, helps protect everyone from fraud and theft. From the merchant account holder, to the consumer, to the merchant provider, everyone benefits.
A third benefit to MLM merchant accounts is the fact that it opens up new markets. When you have a merchant account provider, you can offer sales online and over the phone. With a website, the sky is truly the limit as far as customers are concerned. As long as someone has an internet connection, they can make a purchase. It’s easy to see why this offers a great advantage for a business that wants to scale up and reach consumers outside of their local market. A MLM merchant account benefits the business’s bottom line by facilitating expansion.
Finding an MLM Merchant Account Provider
If you’re convinced by all the MLM account benefits that exist and are ready to take the next step and find one, that’s great news. It may be hard to find a typical merchant account provider to provider an MLM merchant account, but luckily they aren’t the only providers out there. There are dozens of reputable merchant account providers that see the benefits of a MLM merchant account and will be happy to work with you. These merchant account providers specialize in high-risk merchants, and will be prepared to accommodate your MLM business. However, it’s very important to be cautious and read up on any potential providers you want to apply to. Some merchant account providers want to take advantage of high-risk merchants.
Make sure you are asking the right questions when you’re offered an account. Will you be charged termination fees if you change providers? How much are these fees? What are the specific terms? Don’t be intimidated by the fact that you’re a high risk merchant: if your provider is legitimate, they’ll prepared for these kinds of questions.The payment processor you choose should be willing to work with you and the needs of your business.
And make sure to highlight things that you have going for you. If you’ve got a great reputation, lower than average chargebacks, or few complaints, don’t be afraid to draw attention to that. Just because you have a high-risk MLM business, doesn’t mean that it’s impossible you can’t negotiate better fees. Another great step is to outline a robust business plan that addresses any concerns about legal compliance or sustainable growth. This shows your processor that you might be a better option than even other MLM companies — and that could mean fewer restrictions on your account. Just remember to be honest and upfront: this shows your provider that you’re a good business to bet on.
MLM merchant account benefits are real and numerous. If you’re in the market for a new merchant account provider, dig around for one that specializes in high risk merchants, like MerchACT, and see where they can take your MLM business.