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What Makes A Continuity Merchant High Risk?

What is a Continuity Merchant?

A continuity merchant uses a business model based on recurring selling and billing. Their customers agree to an automatic recurring subscription to goods or services.

Continuity offers sometimes start with a free trial or a deep discount offer. Customers usually pay a nominal shipping fee, and they get to use a product or service at a lower risk since they’re not paying a full price. If they’re impressed, they will agree to be billed monthly or annually (depending on the offer) to continue using the product or service. If the customers no longer want the product or service, then they will have to contact the merchant for cancellation of the monthly service and billing.

Many continuity offers are more straightforward – gym memberships, alarm monitoring, monthly coaching plans, etc. These “simple continuity” plans have no discounted or trial aspect to them. Because they avoid the potential pitfalls or trials, these types of accounts are often available with more streamlined set-ups and lower costs.

These tried and tested marketing strategies are an old and well-established way of selling products. They are used by many businesses such as; entertainment services, book clubs, beauty products, and software services, and can raise recurring revenue to new levels

Generally, a continuity merchant is considered “high risk” because of the potential for trial offers sales strategies and the passive nature of recurring billing in general. Anytime a customer is automatically billed, without “re-approving” a transaction, the risk of chargebacks, regulatory issues, or processor losses increases.

Why trial continuity offers are especially problematic

While a trial offer sales strategy is an excellent way to gain new customers, it’s also prone to unfortunate situations. A trial offer strategy generally experiences a higher-than-average amount of chargebacks and refunds, making it considered high risk by credit card processors. Depending on the product sold, obtaining processing for this model can be anywhere from somewhat easy, to almost impossible. Contact us anytime for a free evaluation, and, if needed, for ideas as to how you can adjust your model in order to accept credit cards.

How to Obtain a Continuity Merchant Account

Although continuity businesses usually generate steady revenue, it can become complicated. If run improperly, these businesses can face a large number of chargebacks. Also, if your product or service is an instant hit, it can create a significant increase in the volume of transactions. Both of these reasons can generate a risky environment for conventional credit card processors. As a result, you need a high risk merchant account to run a continuity or subscription-based business. Ideally, you want a high risk merchant account that offers services specifically designed for continuity business models.

Working closely with a high risk payment processor can help you determine what realistic highest ticket and monthly volumes are for your type of business. They will also help to ensure that your website is secure and up to standards. Payment processors with high credibility will offer solid chargeback mitigation schemes. These mitigations can save your business from fraud and false allegations.

How We Can Help

If you need high risk merchant services for continuity marketing, you’ll find that there aren’t a lot of options available. The options that do exist often require quite a lot. You need tons of information and signatures on long or complex forms. We, on the other hand, make things easier and guide you throughout the process.

We offer a simple pre-qualification form, a few easy-to-gather documents, and unmatchable customer service. We’ll use our expertise to help you find the best payment processing solutions. Not only this, but we will even help you test your system to ensure that everything is working smoothly and according to your requirements.

Contact E-Commerce 4 IM Today

If you are a continuity merchant looking for the right company to trust with your business, you’ve come to the right place. We will help you find the right continuity merchant account that meets your unique needs.

Give us a call today at 1-800-570-1347 to learn more. If you have any questions or need some additional information about us, contact us now. We will be glad to help you out!

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