The Effects of the Pandemic on High-Risk Merchant Accounts

What Will the Future Hold for Businesses Affected by the Pandemic?

We’ve seen the devastation that COVID-19 has caused, but businesses need to keep an eye on the future. What will the pandemic hold for business owners in the future? While investors are pouring money into biotech and software, what can businesses with high-risk merchant accounts do to remain relevant going forward and what does the next decade, post-pandemic, hold for businesses?

What We Know About the Effects of the Pandemic on High-Risk Businesses

The impact of the coronavirus pandemic has been felt around the world. As the virus continues to affect many countries, killing millions in its path, the economy is also suffering greatly due to travel and business restrictions in the effort to stop the pandemic from spreading any further.

The Federal Reserve has already stated that it will keep interest rates at rock bottom until 2023, giving a much-needed boost to lenders in both the business world and the public sector. But while there has been ongoing panic and chaos everywhere, a lot of people think that online businesses are benefiting from all the restrictions since most consumers are now spending their money online. The International Monetary Fund (IMF) has actually asked countries that can afford it to allow borrowing for investment. The goal is to shift focus from fiscal responsibility and promote growth in the private and public sectors.2

The truth is, however, that online businesses affected by the pandemic also need to pivot in order to survive. The surge in online orders, the uncertainties in supply chains, and the delays in deliveries are just some of the challenges that are overwhelming businesses, especially high-risk merchant accounts.

 

The Real Situation

Contrary to what most people believe, a lot of online retailers are struggling to cope with the effects of the pandemic. Sure, there has been a huge rise in orders but that in itself poses different risks for you as a high-risk merchant. In fact, this is the time to protect your payment processing channels because fraud, unpredictable buyer behavior, and questionable marketing practices can put your business at risk for losses and, worse, closure.

The real situation regarding how the pandemic is affecting high-risk merchant accounts and business overall is layered with uncertainty – that uncertainty can be unnerving. Any expert payment processing company knows what signs to look for and how to keep their clients’ accounts safe. It all comes down to who you work with.

 

The Challenge Facing Businesses Affected By the Pandemic

One of the biggest challenges online businesses face is the shortage and disruption of the supply chain. A lot of materials, tools, and products are manufactured in Asia, which is one of the most affected continents in the world. So even if you have a higher rate of orders, you might have problems procuring enough products, especially since a lot of manufacturers in China and other Asian countries have closed down due to the pandemic. If you can get a hold of the products that you’re selling, you can also expect delays due to limitations in travel and stricter rules for shipments.

As a high-risk merchant, this poses a huge problem since any delays or cancellations in orders due to a shortage of supplies could easily be a reason for a string of unwanted chargebacks. And in this time where you can’t afford any losses, a higher chargeback rate could hurt your finances even more and make you lose your merchant account.

 

The Way To Move Forward Post-Pandemic

Although this pandemic has caused several disruptions that could affect your online business in many ways, you can still protect your merchant account and your business by being smart about your choices. For one, you need to communicate with your consumers properly and always set expectations with every purchase. Let consumers know about any delays in orders and shipments; always keep communication lines open for questions and complaints. Never hide any issues that you’re experiencing with the supply chain and make sure to keep them updated with the progress of their orders.

It’s also very important to be more aware of friendly fraud and other scams that could result in a higher chargeback rate, which can get your merchant account canceled. Reevaluate your customer support as well as your cancellation policies and always make sure that you are adding value to the products and services you offer customers.

 

Stay Ahead of Policy Changes with Tips for Businesses Affected by the Pandemic

Review Your Accounts: Pay close attention to how changing market trends could be affecting your marketing, both online as well as traditional advertising.3

Communicate Changes: Ensure you are communicating with clients consistently. As new policies roll in, send emails and call clients personally.

Change Strategy Quickly: Your teams should be prepared to adjust their strategy quickly and efficiently based on the changing post-pandemic business climate.

Plan Ahead: There is already talk of a shift in how companies are managing their employees’ schedules. Are you ready to start doing business online and to have employees work from home again?

Move to Digital: How much of your current business can be pivoted to a digital platform? As consumers rely more on the internet, businesses must accept credit card payments online in order to cater to a larger customer base.

Cut Operating Costs: If you have a high-risk merchant account with traditional fees, you may want to shop around for signup bonuses. Talk to other business owners to share advice and strategize for the future. The truth is that we will only get through this if we work together.

 

Looking for a New Merchant Account Provider with FCP

If you are looking to cut operating costs and reduce your merchant processing fees, sign up for a new merchant account and save 25% instantly. Call First Card Payments and speak to one of our experienced merchant support team members. We are here to ensure that you find the best processor for your needs as one of the many businesses affected by the pandemic.

Sources:

[1] MarketWatch – Opinion: Venture capital investors are preparing to pour money into biotech and software in 2021

[2]: Forbes –  Looking Ahead To 2021 And The Economic Impact Of Covid-19

[3]: WordStream – 4 Major Trends Caused by COVID-19 and How to Respond [Data]