Subscription and Annual Membership Merchant Account

The internet has opened up a wealth of business opportunities for entrepreneurs in recent decades, including membership websites. Whether a merchant is offering products or information, the exclusive nature of a membership site promises customers a uniquely rewarding experience. However, like many online enterprises that carve out new business niches (or that fill existing niches in new ways), the membership site industry has experienced some bumps as it finds its feet. As a result, it can be a bit challenging for merchants starting up a membership site to do the very thing that makes the venture profitable: collect membership fees from customers via a credit card processing account.

Most traditional financial institutions are, by their very nature, cautious – both of financial risk and of danger to their reputations. If they have concerns that certain business practices common in a certain industry might prove “brand damaging,” they’re far more likely to cut loose any merchant in that field than examine in depth whether an individual client is engaged in shady business practices. In 2010, the proprietors of many membership websites found their merchant accounts abruptly closed. The reason for this was that MasterCard had released new guidelines that put certain practices common to the membership site business model under much greater scrutiny. Now, membership sites are regarded as “high risk” merchants whether they engage in these activities or not. This makes it hard for a business owner to find an institution willing to accept his application for a membership site merchant account in the first place, and even harder to find one that will offer him reasonable terms on his account.

Why are Membership Sites Deemed “High Risk”?

Before MasterCard’s tighter rules were implemented (Visa has also issued similar guidelines), many membership sites used techniques that were widely regarded as deceptive, or even fraudulent.

  • “Negative option” enrollment – in other words, the customer makes a single payment for a product or service, but in doing so they are automatically signed up for a paid monthly subscription which they must actively cancel or opt out of to avoid being charged.
  • “Free trials” that aren’t free – the customer or member is promised something for “free” (including “deferred billing” or “just pay shipping!”), but the process of obtaining the “free” item or service results in them unknowingly being signed up for a paid membership or subscription.
  • Burying terms in the fine print – the membership site makes the terms of its charges and refund policy difficult to find by hiding them in the middle of a lengthy user agreement, or in tiny text in some obscure corner of the website.

How Does this Affect Your Business?

Your membership site may be entirely forthright and honest with its members about any charges to their cards, but being part of an industry with a reputation for deception makes it harder to obtain a membership site payment processing account – especially one with decent rates and conditions. Your best option is to work with a credit card processing company that specializes in high risk merchant accounts. Some of the payment processors willing to offer you an account may charge high fees or hold back an unnecessarily large percentage of your income as a “rolling reserve” to cover the risk of chargebacks and other losses from unhappy members. While processing companies are taking a gamble by offering accounts for membership sites and need to protect themselves, these high rates can be painful for small businesses. Durango Merchant Services is proud to work with high-risk merchants and listen to their needs in order to provide affordable membership site accounts.

National and International Options for Subscription Business Merchant Accounts:

Durango Merchant Services works with several gateway processors and suppliers with sponsor banking relationships that provide both US based national and international credit card processing solutions. We can provide merchant accounts for the subscription companies under one of the following two options:

Requirements to open a merchant account for membership sites and SAAS businesses in the USA:

  • Company entity based in the USA.
  • REPRESENTATIVE of the company based in the USA.
  • Bank Account is in the USA

Requirements of the European membership and subsriber company merchant account:

  • Minimum $ 50,000 USD per month in sales
  • The company must be based in the EU

Merchant Service Prices and Contract Terms:

If you are looking for a SAAS and membership website merchant services provider, contact us by email or call us today to discuss setting up a merchant account for your business. We will discuss the following:

Available prices for subscription company payment processing:

  • Discount rates that range between 1.95% and 4.95%
  • Authorization fees ranging from: $ 0.15 to $0.25
  • Monthly installments: rates ranging from $ 5.00 per month to $ 60.00 per month

Other terms of the membership site industry credit card processing contract:

  • Rolling reserve requirements that range from: 0% of the rolling reserve to 10% of the rolling reserve
  • Variable contract lengths including availability of month to month
  • Free application processing
  • Direct financing with regular deposits (either daily or weekly depending on international vs. onshore)

Additional benefits of the subscription service merchant account:

If you get a subscription or membership service merchant account with Durango Merchant Services, then you will also be eligible for other benefits that we offer, we can set you up with electronic commerce and recurring billing via our online portal. Businesses can receive the following additional benefits:

  • Competitive rates
  • Acceptance of multiple currencies and deposits
  • Compatibility with major gateways and shopping carts
  • Accept Visa / MasterCard / American Express at your store
  • Integration assistance with more than 100 shopping carts
  • Chargeback prevention tools and advice
  • eCheck processing
  • Our gateway comes with industry leading fraud detection and prevention tools

We provide SAAS merchant accounts for the following:

  • Startups and existing businesses – we help all types of businesses
  • If you have been Previously rejected or discarded by another processor, we can help you get back on track
  • High ticket merchants and merchants with bad credit
  • Minimum processing: $5,000 minimum for national accounts, $50,000 for international accounts

Durango Merchant Services is here to help secure your Subscription Service 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 SAAS or membership service 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.