How to Stay in Business During the COVID-19 Lockdown
The COVID-19 quarantine has had a profound impact on the way everyone conducts business. Those who used to rely on their credit card swipe machines for business have almost universally had to adapt to the times with an internet merchant account and an online component, if they didn’t have those already.
At this point, you may be wondering how to secure your business online, especially if you haven’t had to rely upon an internet merchant account in the past. Read on to learn a few methods and some quick tips for conducting your business under these new circumstances.
Changing times
Digital stores were already replacing face-to-face transactions well before the coronavirus pandemic arrived. However, the quarantine has drastically accelerated this process, leaving businesses without refined internet merchant accounts scrambling to catch up.
Obtaining a merchant account that will work online is the first thing any business needs to do in order to survive the financial effects of the pandemic. This means identifying the risk level of your business and finding the merchant vendor that works for you.
High-risk processing
Businesses that are in industries that have a high percentage of chargebacks and transaction disputes are part of what’s called a high-risk industry. This can apply, for example, to gambling and pharmaceutical industries, and it affects many others. If you’re in a high-risk industry, it may be more difficult to obtain a merchant account, or your discount rate – the money you pay your payment processor per transaction – could be higher. This is a potential issue for all high-risk businesses, but it is particularly true for businesses that operate primarily online, as opposed to businesses that operate primarily face-to-face.
To prevent this, find a merchant account provider that specializes in obtaining merchant accounts for high-risk businesses. This is when it’s a good idea to shop around for different internet merchant accounts to see your options.
Dealing with bad credit
Having bad credit can impact your business as well. Since internet merchant accounts are so important right now, your ability to obtain one and the rates you get when you sign up could have a huge impact on your profitability.
Bad credit and a bankruptcy within the last ten years could also make getting an internet merchant account more difficult or increase your rates. Again, it is a good idea to shop around and find a merchant account provider who can assist merchants who have bad credit.
It may seem counter-intuitive, but being able to commit to a high volume of transactions can actually increase your chances of being approved and lower your rates. This is because the underwriting risk for the account is spread out among more customers making more purchases, ensuring that revenue will be available to cover occasional chargebacks. If committing to a high volume is not an option, then consider ways of eliminating–or at least consolidating–your debt to improve your economic standing. Discuss these options with your bank.
The Takeaway
The COVID-19 quarantine is affecting every business. Those without an online component need an internet merchant account to stay relevant. Even those that have one may not be used to putting their credit card swipe machines in storage and relying on their internet merchant accounts for business.
Of course, there are steps you can take to make this transition easier.
Visit Charge.com or call them at (888) 924-2743 to learn your options and find a payment processor that can provide a merchant account with the best rates for any business, including high-risk businesses, as well as with applicants with bad or no credit.
