One major aspect to consider when choosing a Credit Card Processor (or Merchant Service Provider “MSP”) is the merchant’s type of business. Every business is placed into a merchant category and given a merchant category code (MCC) and if a business has a high-risk MMC, they will be charged a higher fee than low-risk businesses. Businesses can be labeled as ‘high-risk’ if they cover any of the following:
- Products sold have a high return rate.
- Require a large amount of capital to get started.
- Considered to be in a high turnover industry.
Some high-risk MCC includes:
- Online gambling or casinos
- Online dating services
- Adult entertainment
- Debt collection
- Magazine or other subscription-based businesses
Why is connectivity such an important issue for merchants?
Most payment professionals will tell you that having a multi-acquirer-set up is essential if you are to maintain a healthy payment stack. However, connecting to payment service providers and acquirers is not that simple; building integrations costs time and energy. These connections also need to be maintained and updated; it is not a quick and easy task.
Merchants want to grow, and to do that they need to reach their audience. Limited or static connectivity stifles growth and not offering the right payment methods can cause customers to shop elsewhere. Studies have shown that 70% of customers would most likely abandon the checkout process if they could not use one of their preferred payment methods.
Merchants who use payment orchestration can connect to multiple payment methods from just one API, the platform also builds and maintains these connections. By connecting to multiple payment providers, merchants can target specific demographics and offer more local payment options. A good example of how greater connectivity can drive growth can be seen with one of our clients. They recently entered a new market which has a strong cash culture and needed help with their cash collections, so we connected to various local payment methods which enabled their delivery drivers to take cash payments and log them online. By giving their customers the ability to purchase online and still use cash, they were able to thrive in this new marketplace.