Making the difficult financing procedure for MOT business easy
Merchant account could be of 3 types internet merchants, retail merchants or MOTO merchants. Each of them comes with a different type of transaction fee structure. Tapping the benefits of each of the type of merchant account, most businesses have more than one type of merchant account. For all the “card present” transactions, the retail account comes with a low transaction fee and more flexible rules to comply with. This is more suitable for all those businesses which have physical stores where an actual card swipe marks the transaction.
While in the case of Internet merchant accounts and MOTO (Mail Order/ Telephone Order) merchant accounts, there is no physical card swipe transaction happening. In these cases, card details are keyed in to the payment terminal and the payment is processed virtually. These digital payment channels are more prone to credit card frauds and failed transactions than the conventional retail accounts. This is one main reason that puts MOTO business in the high-risk category.
Why do businesses need MOTO accounts?
As businesses get more competitive, having a strong online presence is requisite to obtain an edge over the competitors. To establish a business online and to be able to take up order via phone, you should have some form of digital payment in place. Any business that involves home delivery of service or product, like e-commerce, hotel or accommodation, travel industry and others might all need MOTO payment accounts as they receive most of their orders over the phone or through the website.
Risks involved in MOTO merchant accounts:
For MOTO accounts, the payments occur mainly through credit card or debit card transaction through payment portals or through bank transfers. This is what makes them risky for the merchant account providers. Because any online transaction comes with some refund or cancellation policies. This puts the merchant account provider more at risks of retracted payments. This makes the MOTO accounts high risk and this is one reason why conventional banks and merchant account providers might hesitate in opening MOTO merchant accounts. This also makes the MOTO merchant account provider impose higher transaction fees. This would reduce their chargeback burdens to some extent.
Why choose Merchant cash advance for MOTO businesses?
Conventional banks as well as most of the popular merchant account providers, considering the risks in the MOTO accounts back out from creation of these accounts. Sometimes the application would be held up and the process would be prolonged for verification, stricter underwriting processes and more. In the end, after the long wait, you might finally get a rejection or even if there is an approval, there might be higher transaction charges imposed or you might have to adhere to very strict policies which might not be the case with other businesses. This makes the conventional channels a bad choice for business funding and merchant account opening for a MOTO business. In this case, you would need a merchant cash advance from a company that specializes in high-risk merchants. Merchant cash advance, as bank loan alternatives are delivered much easily than a normal bank loan and small business cash advances given by lenders. Choosing a high-risk merchant account provider would ensure that you are relying on the right channel. This would give you better approval rates. The processing times would be much quicker. These are the type of companies that might handle all the Bad credit cases as well as businesses with non-sufficient funds. Bad credit cases might be common for MOTO businesses in the situations where there are too many refund requests which cannot be avoided.
Financing equipment purchase and office setup:
MOTO account might not necessarily be your sole merchant account. You could simply use it to handle all your online orders and telephone orders. You would, however, need an office setup. To purchase equipment for the office as well as for the employee payroll management, merchant cash advance offered by high-risk merchant account providers come in handy.
You could also get merchant cash advance from a different source than from your merchant account provider. In case you merchant provider’s cash advance terms aren’t suitable, in case you wish to rely on a different company for the business cash advance, you can even do this without having to switch your merchant accounts. This makes the process of transition smoother and you would be able to proceed with the existing system without doing extra paperwork.
Funding for 2nd, 3rd, 4th and 5th positions:
High-risk merchant provider also makes it easy to apply for a loan or advance for 2nd, 3rd, 4th and 5th positions. This way you would be able to tally the gap and balance your finances no matter how the cash flow is in your business. You need not have to wait for the invoices to be cashed. You would still have a steady source of cash advance to plan for building your business, planning expansions and marketing as well.