- 1 A brief overview of merchant accounts and why we need them
- 2 What are High-Risk Merchant Accounts?
- 3 What is Kratom?
- 4 Reasons why Kratom Merchant Accounts are Considered High-Risk
- 5 Getting a Kratom Merchant Account
Kratom has become one of the most popular natural alternatives to prescription medicines. It comes in a plethora of varieties, so there is a product to suit everyone’s needs. The promising potential and the increasing demand for kratom have made it a worthy candidate for a profitable business. If you’re considering trading kratom commercially, there are many things you’ll need to think about seriously. To make it simple, in this article, we will discuss a few things that you should know about kratom merchant accounts.
A brief overview of merchant accounts and why we need them
Every business needs a merchant account and a payment processor to handle monetary transactions. A payment processor is a company that will get your merchant account approved. It is also responsible for controlling the merchant account on behalf of the client. A merchant account is a business account that holds the funds collected from all debit and credit card transactions. After the duration of a few days, the money is automatically deposited into the owner’s bank account.
What are High-Risk Merchant Accounts?
To get a merchant account, you first need to figure out whether or not your business is high-risk. When you apply for approval for a merchant account, being classified as high-risk can have serious implications. High-risk merchant accounts are run by payment processors that specialize in handling high-risk businesses. To assess the risk factor, banks will lot not only at what you sell but also the potential for fraud and chargebacks.
There are a few deciding factors that can classify your business as being high-risk.
- Businesses that sell products that are on the fringe of being illegal;
- Businesses that sell controversial goods and services;
- A poor credit score of the business owner;
- Businesses that are not registered with the local regulatory authorities;
- Based on the type of business industry, etc;
What is Kratom?
Kratom products are made from an evergreen tree that grows in Southeast Asia. It is being used for centuries for its medicinal properties. Kratom contains a chemical called mitragynine that is highly effective for pain management. Over the years, kratom has displayed a myriad of beneficial properties. These days, people use it to deal with various health and wellness-related issues. It is known to help with problems like sleeping disorders, anxiety, withdrawal from drugs, etc.
Kratom products like powder and capsules are made by drying and crushing the leaves of the kratom tree. The leaves exhibit unique properties and varying levels of effectiveness based on the timing of the harvesting process. Kratom is a close relative of the coffee family and works as a great stimulant. It also provides effects similar to morphine and nicotine. People use it to improve alertness, reduce stress and anxiety, regulate pain, etc. However, even though kratom shows promising potential, it is not backed up by medical authorities just yet. Some reports suggest that kratom might cause some side effects due to improper dosage.
Reasons why Kratom Merchant Accounts are Considered High-Risk
Your kratom business can be considered high-risk for the following reasons:
Banks often judge businesses based on the reputation and actions of other similar companies and the industry your venture is a part of. Certain business owners need to find payment processors that are connected with banks willing to provide services. Many service providers will deny providing services outright when you state that you deal in kratom products.
Unfounded Health Claims
Any health and wellness-related products that make health claims without FDA approvals tend to have a hard time finding payment processors. These health claims are vague sentences like “can help with stress,” “helps relieve anxiety,” etc. these are groundless claims that are not backed by any authorities or considerable research. There is no valid proof about the certainty of kratom curbing opioid addiction. There is no proof that it can cure insomnia. Merchant account providers do not consider customer reviews or customer claims.
New and Controversial Industry
The kratom industry is a new and emerging industry that is still being evaluated. The risk factor here comes from kratom being relevantly new and untested. There is no guarantee about the effects and quality of the kratom products.
Plants and Herb-based Supplements and Products
Health supplements derived from plants and herbs automatically fall into the high-risk category. Over the years, payment processing companies have designated several industry types as high-risk permanently. Since kratom products are plant-based supplements, they are automatically classified under a high-risk business category.
Adult Products and Infrequent Processing
The industry of adult products is another one that is permanently characterized as high-risk. Dealing with goods and services for adults will classify your business as high-risk. Another factor that providers consider before approving merchant accounts is the frequency of transactions. In a kratom dealership, there is no guarantee of a minimum sale or frequency of purchases.
Getting a Kratom Merchant Account
Before approaching a payment processing company, it is essential to do some homework. Thanks to its high-risk nature, securing a merchant account for a kratom business is no easy task. You might want to stay away from providers that have no experience in handling high-risk merchant accounts. Finding the right provider will significantly impact your business because of how the approval process works. Procuring a good merchant account will facilitate payment processing and collection safely and securely. It also is a convenient method for selling products online. For a high-risk business owner, it is crucial to have a reliable provider.
There are a lot of risks involved with securing a good merchant account provider. It does require patience, but in this line of work, it is the best way to manage business transactions. Having a clear idea about all the different aspects of a high-risk merchant service provider will help you find the best processor and avoid waiting for months to hear about declines or approvals.