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Thanks to dropshipping, anyone with a website can start a retail business. Quick, easy, and low-cost to set up, the dropshipping business model is enjoying explosive growth. The US dropshipping market was worth $44.1 billion in 2021. With the right marketing savvy, you can generate plenty of revenue in America’s $500 billion ecommerce industry.
Dropshipping requires little capital and no inventory, making it the ideal low-risk business. Banks, however, think otherwise. Most traditional banks don’t offer merchant accounts for drop-shipping businesses because they consider this industry to be high-risk. Without a merchant account, you will struggle to sell online and run a viable ecommerce business.
With extensive expertise in high-risk industries, SeamlessChex can help you get a merchant account within days. Check out our range of high-risk payment gateways for drop-shipping businesses to find the best solution for your needs:
Seamless ChexAccept verified eChecks online or over the phone. Seamless Chex makes check processing more efficient with instant onboarding and next-day deposits.
PaynoteSend and request one-time or recurring ACH payments with real-time tracking. Paynote saves you time and money by automating your accounting processes.
Seamless MerchantProcess debit and credit card payments from anywhere. Seamless Merchant offers physical and digital terminals for retail, ecommerce, and mobile payments.
From budding entrepreneurs to retail giants, everyone is adopting drop-shipping to generate a new revenue stream. While this supply chain model provides many benefits to businesses, the industry is not without its problems. Several factors make this industry high-risk to banks. Here are some reasons why you can’t get a merchant account for your drop-shipping business:
The same low barrier to entry that makes dropshipping attractive is also what makes it highly competitive. For every product you offer, there are zillions of other businesses that sell the same exact item. And worst of all, the industry is dominated by giants like Amazon. This makes it very difficult to run a successful dropshipping business.
A high-risk payment gateway for drop-shipping is necessary to combat excessive fraud in this industry. Because you don’t own any stock, drop-shipping only works as an online business. And to run an online business, you must process card-not-present (CNP) transactions. Fraud is 81% more likely with CNP transactions compared to in-person payments.
Another reason why banks don’t provide merchant accounts for drop-shipping businesses is the high rates of customer dissatisfaction in the industry. With no inventory and fulfillment services, drop-shippers have no control over the supply chain. Selling out-of-stock items, uncertain delivery times, and returns problems lead to plenty of unhappy customers and chargebacks.
Yes ⏤ you don’t buy any inventory and the supplier takes care of fulfillment. Since you’re outsourcing most of the business, you won’t generate much profit. If your business goes bust, your bank or processor is responsible for paying off chargebacks. This is why financial institutions shun the dropshipping industry.
Seamless ChexAccept verified eChecks online or over the phone. Seamless Chex makes check processing more efficient with instant onboarding and next-day deposits.
PaynoteSend and request one-time or recurring ACH payments with real-time tracking. Paynote saves you time and money by automating your accounting processes.
Seamless MerchantProcess debit and credit card payments from anywhere. Seamless Merchant offers physical and digital terminals for retail, ecommerce, and mobile payments.
SeamlessChex has more than 15 years of experience helping businesses thrive in high-risk industries. We know all the challenges you face and have developed many solutions to help you overcome each problem. Leveraging our close relationship with more than 25 banks, we’ll underwrite your business and help you get a merchant account for drop-shipping within days.
Getting a merchant account does not mean your troubles are over. In an industry with high rates of fraud and customer dissatisfaction, keeping your merchant account is the real work. SeamlessChex provides state-of-the-art chargeback mitigation technologies and dispute management solutions to protect your account from the risk of termination.
Our high-risk payment gateways for drop-shipping businesses:
Are you struggling to get a drop-shipping merchant account? Is your current account provider devouring your profits with excessive fees? Whether you’re a new or established drop-shipping business, SeamlessChex can meet all your payment needs. Sign up for your free trial now to see how our platform can help you grow. And don’t forget to contact us if you need more help.
