People need cars to get around from place to place, and it’s up to automotive businesses to not only provide those automobiles, but also to offer additional services like repairs, replacement parts, and maintenance in order to help people keep their cars in a safe and roadworthy condition.
Setting up an automotive business can therefore be a great option for entrepreneurs who want to break into this lucrative industry. However, there’s a lot that needs to be done before you actually start doing business, and one of the biggest things to sort out is your automotive merchant account.
This is a vital piece of the puzzle for automotive businesses, but getting an automotive merchant account isn’t always easy. In fact, there are many challenges that can arise, but Shark Processing is here to help. Read on to learn all you need to know about merchant accounts for the automotive industry and how to get one of your own.
Statistics show that the automotive industry is responsible for close to 3% of the United States’ Gross Domestic Product (GDP), equating to hundreds of billions of dollars a year. In other words, it’s a huge industry that makes a major contribution to the economy. But what do we actually mean when talking about the automotive industry and automotive businesses?
Well, the term is quite a broad one and can encapsulate a wide range of different businesses. Automotive businesses can include car dealerships, auto repair shops, and aftermarket car parts manufacturers. delivery services, airport shuttle services, auto detailing businesses, auto servicing specialists, auto electronics shops, and much, much more.
In short, there are many different directions you can choose to go when setting up an automotive business. However, regardless of the path you choose and the sort of business you decide to set up, you’ll need to make sure of one thing: you have to have your own automotive merchant account. This is what makes it possible to receive electronic payments, and without it, your business has little chance to grow or even getting started in the first place.
So what do we mean by the term “automotive merchant account” and why are these accounts so important for the average automotive business in today’s world? Well, in order to understand what is an automotive merchant account, you first need to understand a basic definition of merchant accounts and know how they function.
Merchant accounts are special business accounts designed for businesses that conduct business online or over the phone and deal with a lot of “card-not-present transactions”, which are basically transactions in which the cardholder and credit or debit card being used for payment are in a different location to the vendor or business they’re buying from.
The merchant account makes it possible for these payments to happen. Without it, you wouldn’t be able to receive any kind of electronic card payments at all. And it works pretty simply: the merchant account receives the payment from your customer and processes that payment before sending the money along to your main business account.
In today’s world, a lot of business is done with electronic payments over the phone or on the internet, and this is especially true in the automotive industry. So, as we can see, it’s very important for the average automotive business to have an automotive merchant account set up and ready to go. But getting one of these accounts for automotive businesses can be difficult.
It’s easy to see why automotive merchant accounts are so important, as they make it possible for automotive businesses to carry out high risk credit card processing and receive payments from their customers remotely. But if you simply contact your local bank and try to open up a new merchant account as an automotive business entity, you may get rejected.
Why? Well, it’s all because the automotive industry is associated with high risk payment processing and classed as a “high risk” industry. High risk industries are those that are seen to be excessively risky for banks and merchant services to work with, and in many cases, banks will flat-out refuse to work with these kinds of businesses.
So what makes the automotive industry so risky and why is it so difficult to get an automotive merchant account even if you run a reputable business? A big part of it is down to costs. Large sums of money are often involved when it comes to automotive goods and services. And when big sums are involved, there’s usually a higher chance of fraud and problems.
Indeed, the statistics show that there are higher-than-average rates of fraud and chargebacks in many areas of the automotive industry, like auto repair shops and car dealerships. Banks don’t like dealing with fraud or chargebacks, so they feel justified in refusing to work with many automotive businesses based purely on the reputation of the industry itself.
As we can see, many banks, payment processors, and merchant services are unwilling to work with automotive businesses, and you may feel helpless if you’re trying to apply for an automotive merchant account and can’t seem to find anyone willing to work with you. However, there are other options out there, and Shark Processing is one of them.
Shark Processing specializes in helping high-risk businesses obtain merchant accounts. We know the perils and pitfalls of high-risk payment processing and high-risk credit card processing, but we work with a network of trusted banks and payment partners around the world to make it easier for those in high-risk businesses to get the financial services they need.
With our help, you can open up your own automotive merchant account with competitive rates, fair fees, and excellent service as and when you need it. Contact the Shark Processing team today to find out more about our automotive merchant accounts and related services.