How to manage e-commerce risk and grow your business online

Ecommerce Website and Credit Card Payment

The e-commerce sector is currently riding the crest of a big wave. At the beginning of 2020, this growing area of retail was being tipped for yet another record-breaking year. But no one could have predicted where e-commerce would be by the end of such a chaotic, unprecedented time, dominated by the coronavirus pandemic that kept people in their homes so much. In 2020, more than ever, people were doing everything – working, socializing and lots of shopping – remotely and online.

By April, year-over-year growth was up 68%. E-commerce orders in the United States and Canada had increased by 129%, and the skyward trend only continued. Make no mistake: the sector has never had it so good. And things are expected to get even better. According to Statista, global online sales are expected to reach $4.5 trillion by the end of 2021, more than tripling from $1.3 trillion in 2014.

If you’re a high-risk business, however, getting in on the action might be more complex than you imagined. Traditional banks and financial institutions don’t like to extend payment processing to high-risk businesses, so you need a specialist provider that’s prepared to offer premium services easily, affordably and supportively.

Why is e-commerce growing at such an incredible rate?

Societies around the world are getting used to the speed and convenience of shopping online, primarily thanks to the smartphone. Delivery services are getting cheaper and growing more efficient. Technology and software are advancing at breakneck speed. The world is embracing e-commerce like never before. 

Just about anyone can start their own e-commerce business; all they need is a computer, an internet connection and access to the right online tools. But you also need vital business solutions such as credit card and payment processing systems and shopping cart software.

Retailers realize that, without an effective online ordering platform, they’re unlikely to survive. Every major company now has a sophisticated e-commerce website, and smaller businesses are following suit.

But 2020 has supercharged the growth of e-commerce. COVID-19 lockdowns have forced millions of brick-and-mortar stores around the world to close. As a result, consumers have flocked to online retailers in extraordinary numbers. And while there will be a recovery in the traditional retail sector eventually, the shopping landscape has undoubtedly changed forever.

Now is the time to grow your retail business’s online presence, however, doing so requires a reliable payment solutions provider. And if your business is regarded as high-risk, that’s easier said than done. But help is at hand, you just need to know how to find it. 

Why are secure payment processing solutions essential?

A successful business needs a secure, high-performance payment processing system to make online buying quick and seamless. Without it, customers won’t get the fast, easy and convenient experience they expect – and they’ll go someplace else where they will.

A modern e-commerce business needs a merchant account, credit card processing systems and a payment gateway. It also needs a raft of safety measures that protect against fraud, theft and other risks. Fortunately, all of these services – and many more – are available from reputable, high-risk payment solutions providers.

What risks do e-commerce businesses need to mitigate?

Unfortunately, risk is an inevitable part of doing business online. No matter how many measures you have in place, you can’t completely protect yourself from criminal activity. But what you can do is minimize those risks by having the right precautions in place.

When money changes hands digitally, there is always the potential for theft, hacking and fraud. But that’s not the only area of risk to consider. Chargebacks are a serious issue, and they affect certain businesses disproportionately. A chargeback is when a customer disputes a transaction, and the money is returned to the payment card. This happens for many reasons, including customer returns, fraudulent purchases, illegal age-restricted purchases, product quality and failed deliveries.

Why do high-risk businesses struggle to find payment solutions?

Traditional payment processing services and banks are extremely risk-averse and can be intolerant. They view certain businesses as high-risk simply as a matter of course. These high-risk operators include CBD merchants, tribal businesses, pawn shops, gun stores and collection agencies, as well as tobacco retailers, gambling websites and more.

All too often, banks see an application for a merchant account from a business in one of these niche sectors and automatically reject it. Or, they may underwrite the account without fully understanding the business, and then suddenly drop it or jack up the fees.

Any merchant that has a chargeback ratio of more than 1% is considered high-risk. If your e-commerce business falls into this category, due to chargebacks or other reasons, you need a specialist provider that employs a range of mitigation strategies to reduce risk to a minimum.

The services offered by a high-risk payment processing partner include age verification, chargeback prevention, fraud detection, a secure Automated Clearing House (ACH) and more.

Benefits of high-risk merchant account providers

  1. High-risk expertise

High-risk merchant account providers understand your business and the industry, giving you a wealth of knowledge and experience in how to operate safely, simply and successfully. The people and strategies behind these services have encountered every conceivable problem out there, so they have the know-how needed to manage risk, whatever and wherever it may be.

  1. Established loss-prevention systems

Alternative processing providers have tried-and-true systems that mitigate known risks and prevent losses. Behind-the-scenes technologies and monitoring systems constantly search for danger, stopping it dead before it affects your business. The most commonly mitigated threats are fraud, excessive chargeback rates, age-restricted purchases and hacking. 

  1. Supportive customer service

Customer support advisors are crucial to helping you navigate the murky waters of high-risk payment processing and integrating your merchant account. And when things inevitably go wrong, they’re always available to answer questions and assist you. With 24/7 customer service and a support team that appreciates your business, you can minimize trouble and ensure payment issues don’t affect your sales. 

  1. Full legal compliance

The Payment Card Industry Data Security Standard (PCI DSS) is a set of regulations, which applies to any business that accepts credit and debit cards. These standards exist to protect both consumers and merchants, and they instill confidence in purchasing goods and services online. There are enough risks out there that your business can’t control, but compliance with regulatory standards is one that you can.

All your high-risk merchant services in one place

FLEX Payment Solutions is a trusted merchant account and credit card processing provider that offers its services to all online and retail businesses, no matter how big or small. We specialize in serving high-risk enterprises, especially CBD stores, vape shops, Native American businesses, firearms dealers and consumer financing companies.

FLEX is an experienced alternative processing provider that utilizes its network of specialized banking partners and powerful in-house technology to manage e-commerce risk at every level. We have a unique compliance background and deliver unparalleled customer support with flexible options and custom solutions that are always tailored to the individual needs of our clients. 

Tell us a little about your niche or high-risk enterprise. We’ll get to work right away on providing you the fast, easy, convenient and secure e-commerce payment processing all your online-shopping customers are craving.

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