MLM Merchant Accounts
Tough, but not impossible.
In terms of applying for a credit card processing account, one of the most challenging types of business to be in is multi-level marketing (MLM). Companies that follow this business model are inherently regarded as high-risk by financial institutions, regardless of the kind of product they sell. In fact, many traditional payment card processors are so reluctant to deal with multi-level marketing companies that they refuse to offer MLM merchant accounts at all, and will turn down a merchant with good credit who has held other accounts with their institution if that merchant seeks to open an account for an MLM-based business.
The primary reason for this widespread allergy to working with MLM businesses is the rampant fraud associated with the multi-level marketing business model. That’s in no way an accusation against every business that uses network marketing to drive sales; some MLM businesses are run by honest entrepreneurs who honestly believe in their product and feel that the best way of getting their message out into the world is with direct selling. However, scam artists have been exploiting the structure of multi-level marketing for decades, using deceptive and illegal practices to reap profits for those at the top of the chain at the expense of the vast majority of their customer/distributors. Because of such people, multi-level marketing has become a synonym for “pyramid scheme” in the minds of most financial institutions that offer merchant accounts. Thus, despite the many benefits for MLM businesses of having the ability to accept credit card transactions, finding a processing company willing to give you a second look can be a Herculean task.
There are some merchant account providers that specialize in credit card processing for high risk businesses like MLM companies, and one of these is likely your best bet for having your application approved. However, despite (or perhaps because of) the disadvantageous position of being considered “high risk,” it’s important to choose carefully. Ask questions about the terms of the account you’re being offered, whether you will be charged termination fees if you decide to change providers, and of course how much you’ll be charged in fees. You deserve the confidence of knowing that the payment processor you’re working with cares about your business’s success and is willing to listen when you describe your needs. Durango Merchant Services has worked hard to earn a reputation for being responsive to merchants’ concerns and dealing with their clients in an honest and forthright manner. Some other, less trustworthy processors will eagerly welcome high-risk merchants desperate to find a payment processing company that will accept them, promising those merchants the moon right up until they sign the contract. After that, they’re suddenly much less communicative, and you’d better hope you read the fine print.
There are other steps you can take to negotiate a better fee and other reasonable conditions with your merchant account provider. Demonstrating a good reputation, a lack of chargebacks and complaints against your company, and a business plan that addresses the processor’s concerns about legal compliance and sustainable growth can make your business seem like a safer bet than other MLM companies, and the credit card processing company may be willing to relax some of their restrictions or lower your fee. Just remember that honesty is important in these proceedings, because if a payment processor senses any whiff of deception or shady practices, they can and will suspend or terminate your MLM merchant account. When you find a processing company that respects your openness and is willing to repay it in kind, you can negotiate a mutually satisfactory merchant account agreement.
Durango Merchant Services is here to help secure your Multi-Level Marketing Merchant Account
Our dedicated team has negotiated on behalf of more than 12,000 clients. We understand the back and forth and give and take of negotiating processing accounts for high risk merchants, including hundreds of MLM merchant accounts.
We know that there aren’t always easy answers. But remember, there is almost always a way forward and if you can make it through the first 3 years with a good track record, life will become much easier and your business will be better for it.