It simply smart business to include backup and redundancy in every operation vital to your company, including payment processing.
Payment processing represents the largest source of cash flow for the majority of online businesses. Proactively establishing back up processing accounts protects your company from the ongoing and unpredictable changes that are constantly occurring in the banking industry.
High risk merchants have long realized the importance of having more than one merchant account to process card transactions. Yet too few have backups in place echecks or direct debits/credits of consumer accounts.
For the past several years, the banks have gotten much stricter on third party electronic check processors due to increased government scrutiny and regulations. As a result, the choices of third party processors have continued to decrease.
Federal Financial Examination Council has issued guidelines with which banks with third party processors must comply.
The banks are required to manage risks associated with third party processors. They must demonstrate that effective monitoring and reporting systems are in place. And must assure that Bank Secrecy Laws and Anti-Money Laundering regulations are strictly complied with.
Banks with third party payment processors as customers are being pressured to guard against be risk of unauthorized returns and use of services by high-risk merchants. As a result, it is more challenging than ever to for high risk merchants to establish electronic check processing accounts.
Don’t be lulled into a false sense of security simply because you have an account that has been functioning well for a period of time. A single rouge merchant in the portfolio of a third party processor can the processor problems that ripple out across the entire portfolio. The good merchants are affected even though they have done nothing wrong.
High volume merchants are particularly vulnerable. Consider the effect on your business happens to you if your processing company is targeted to be investigated by the banks.
Payment processing is vitally important to your business. Yet depending upon a one account is risky. Diversification of payment processing accounts is a prudent strategy to protect cash flow and keep your business safe.
Interested in diversifying your payment processing accounts to protect your business?