How Push Payments | Consumer Permissioned Payments can solve the merchant account Merry Go Round for high-risk business payment needs?
High-risk businesses can typically obtain a business bank account. The problematic and challenging issue is obtaining and keeping a merchant account. Traditionally high-risk businesses apply (usually multiple times) to obtain a merchant account. We are referring to accepting credit card payments via debiting the consumer’s card.
Because of the perceived risk of chargebacks oftentimes a $ reserved is collected upfront to mitigate chargeback risk. Additional measures to mitigate risk might be weekly or bi-weekly payouts. By paying out less frequently the payment processor reduces chargeback exposure. Chargeback ratios are typically capped at 1% and overage can mean your account is terminated. This often creates a Merry Go Round of trying to obtain and keep that new merchant account.
Push Payments | Consumer Permissioned Payments solve this problem in a unique way.
THERE IS NO MERCHANT ACCOUNT
The consumer initiates a credit (Push Payment) from their bank account directly to the merchants. There is no middleman payment processor that debits the consumer and funds the business. This is accomplished by connecting the consumer’s bank account via lightbox log-in to their online banking account.
Push Payment FAQ’s
- Does it really eliminate chargebacks? Yes-the consumer is providing express permission to pay for an item or service
- Can anyone pay via PushPayments? Anyone can provided they use a bank that participates in the RTP network and the entity being paid also has a bank in network
- Are there prohibited businesses? There are high-risk business types that are ineligible. This includes adult, credit repair, basically the usual suspects that typically must rely on high-risk merchant accounts. Crypto and legal betting ARE eligible. All businesses must be US domiciled.
- What does it cost? Typically 50 cents to a $1+.
- How do I sign up? To start we would have a conversation about your business. If everyone agrees you complete an application (similar to a merchant account). Because the risk involved is mitigated by finality of payment and certainty of good funds the primary risk concern is reputational. Eg “Could your business damage the reputation of either the banks involved or your Push Payment Provider?