Who doesn’t want to boost their brain power? Formerly only relevant among the aged and challenged, the nootropic industry is presently valued at over $10 billion. Expected to increase in size and value over the next few years, this industry has become a thriving atmosphere for budding brands and businesses to take root.
Even the smallest contenders get their fair share of attention by operating online. But hitting the eCommerce scene also means having to secure a nootropic merchant account. And because of the high risk associated with nootropics, setting up a high-risk merchant account often gets in the way of business.
First things first — what is a high-risk merchant account? These specialized bank accounts are granted solely to high-risk businesses and open up the possibility of accepting digital payments. This can happen both in-store and online and works to provide customers with accessible, convenient payment options.
Unfortunately, merchant accounts come with loads of red tape. Costly to maintain and prone to chargebacks, these accounts get granted only to merchants that can prove their capability to minimize card issuers’ and banks’ losses.
Thus most conventional, traditional merchant acquirers avoid partnering up with high-risk merchants that could risk payment reversals initiated by customers. And while some of them might agree to work with high-risk merchants, they’ll impose heavy fines and difficult contract terms that make it tough for merchants to toe the line.
They do this to guarantee that high-risk merchants do their part in exercising all resources to prevent chargebacks and to keep up with fees, charges, and penalties. But in doing so, they also place an unnecessary burden on merchants, making it difficult for them to grow their businesses.
Numerous factors come into play when banks and acquirers calculate a business’s risk. And while every institution might use its own measures and arithmetic, the factors they consider mostly stay the same.
|FACTOR||LOW RISK||HIGH RISK|
|Location||Within the US, EU, Canada, Japan, or Australia||Everywhere else|
|Average transaction cost||Under $500||More than $500|
|Average monthly revenue||Under $20,000||Over $20,000|
|Transaction type||Card present||Card not present|
|Payment scheme||One-time||Subscription or recurring|
|Industry||Low risk||High risk|
Conventional merchant acquirers tend to avoid nootropics because it’s perceived as a high-risk industry. But why exactly? According to sources, nootropic businesses have a uniquely higher risk of experiencing chargebacks versus businesses operating in industries like apparel and furniture.
A chargeback happens when a customer reverses a transaction and requests to have their money returned to their account for any reason they deem necessary.
Once put in place to protect cardholders and reassure them of the safety guarantees of using cards to pay for their transactions, many businesses today perceive chargebacks as friendly fraud because no one can contest customers who initiate the process.
Nootropics receive significantly more chargebacks than other industries in low and moderate-risk categories because of the nature of the products. Every person will respond differently to nootropics. It’s unregulated and effects and benefits aren’t always guaranteed.
Of course, there are tons of reputable, reliable brands out there that deliver above and beyond the promises they make. But there are an equal number of nootropic businesses that make a reputation out of setting high expectations and then failing to meet them.
When this happens, customers have the option to request a chargeback. This process entails loads of fees from merchants to card issuers and everyone in between. And because chargebacks spell losses for every player, merchant acquirers heavily penalize high-risk merchants with increased chargeback risks.
Every business that wants to maintain relevance in today’s highly competitive nootropic market would do well to secure a high-risk merchant account. But how exactly does it benefit brands in the here and now?
Here are a few advantages you can expect:
Customers have strongly held preferences when it comes to payment options. And if you don’t offer the choices most accessible and convenient to them, there’s probably a nootropic store down the block (or on the web) that does.
A high-risk nootropic merchant account means you can provide your products to anyone with internet access. The ability to take digital payments expands your reach and opens your business to international customers.
Keeping in tune with other nootropic vendors helps make sure you’re not lagging behind. Offering a diverse range of payment options gives customers fewer reasons to leave your store in favor of other businesses that offer greater convenience.
With traditional banks, the whole process can be a pain in the neck. But at Shark Processing, it’s as simple as one, two, or three. Simply send in a pre-application form, wait for our call, and get your approval. Fast, easy, and guaranteed placement that eliminates the legwork.
At Shark Processing, we’re confident in our ability to place you with a merchant acquirer that truly matches your business. There are no cookie-cutter solutions here — we meticulously assess each application to establish business partnerships that last.
For high-risk merchants, there’s Shark Processing. Avoid the long waits, the unanswered emails, the uncertainty, and the painful rejection when you hand us the reins.
Enjoy 24/7 support, lightning-fast placement, and a safe, secure high-risk merchant account application when you trust Shark Processing. Because here at Shark Processing, high-risk merchant accounts are what we do best.