There are two ways to get a high risk merchant account for an MLM company. Either apply with a domestic acquiring bank that has strict and almost refraining underwriting guidelines for your industry domain, or to apply with an offshore merchant account provider that may come up with suitable options at a higher rate in comparison to the domestic ones.
The underwriting guidelines of most of the domestic banks make sure to avoid any possible risk while acquiring a merchant account and MLM business being a high risk business has negligible chances to avail one. If the underwriter goes with an individualistic approach and looks into the applicant’s business model, expected overturn, financial background and decent credit score, then there are chances to get a merchant account for the high risk MLM company.
If the merchant doesn’t succeed with domestic banks, he should search for offshore service providers. These days, a large number of offshore processors are ready to provide services to this segment. A merchant should be careful and wise while deciding an appropriate offshore merchant account provider. Generally, the transaction rates of offshore processors are higher as compared to the domestic banks and they do have provisions of rolling reserve, hold period and other charges.
If we talk about the realistic terms, credit card processing and online payment is need of the hour to continue and expand an MLM company. These companies should negotiate well with the service providers to get a customized processing plan that best suits their business frame. The decisive factors to get a high risk merchant account are options of automatic renewals, buyer’s remorse, unpredicted business flow, uncertain transactions, regulations and chargeback alert services.
Business ethics and financial laws protect the customer rights globally and that primarily includes the right of chargeback. If a merchant in MLM business wants to have a stable and running high risk merchant account, then he should always keep the chargeback ratio below the typical limit of 2% in all cases. The MLM business is dreadfully affected by the high intensity of chargebacks initiated by the credit card issuers or service providing companies. The key to run the high risk merchant account successfully is strong customer relationship and regular feedbacks from the customers to ensure that they receive the best quality services and products.