The cost of online fraud and basic lack of data is creating uncertainty for payment gateways especially in ecommerce. This has lead to payment gateways either rejecting customers or charging a very high fee.

I talk to many online merchants on a daily basis and lot of the either complain to me about the high fees or the inability to even open merchant credit card accounts. Below I have outlined 5 reasons for why payment gateways charge so much or are rejecting customers.

They don't understand your country risk profile

If you are from a country which the Payment gateway is not familiar with there is immediately a barrier created as they are worried that they don't understand the way business is done in your country, the legal system or the fraud risk. There is too many examples where a person signups from a country the merchant is not familiar with immediately getting rejected or being charged high fees.

Tip: try to approach payment gateways who have customers from your country and familiar with business practiscs there.

It is hard to understand your online business models

With the huge amount of fraud happening online, it's really hard for a payment gateway to differentiate between real ecommerce sellers and fraudulent ones. Too many websites look generic and sometimes business models are not easy to understand. This is in contrast to manufacturing which is very easy for a payment gateway to understand.

Tip: think about documentation, legal structures and creating a visible business online which a person can easily go and verify For example 90% of the merchants that approach us don't even have a trust pilot account or online reviews. How do you expect me to trust you?

Hard to understand the people behind the business.

Ecommerce business is hard, merchants are working very hard to run their business. Often I see these very people not investing in creating their own profiles whether it is on linkedin, Facebook or the basics in terms of proper up to date documentation that is required such as passports, proof of address and company details.

Tip: make sure you invest in you and your teams online and offline profiles. This adds to your legitimacy. Also make sure your documentation is in order.

Providing incorrect information

Giving incorrect or even false information is a big red flag. It is common in new businesses to have ‘proposals’, estimates and ‘proforma invoices’ etc. but this is simply not acceptable in financial invoices. These documents which are often provided to merchants are a big red flag and a guarantee for either the customer being rejected or high fees being placed on them.

Tips: be honest with your merchant gateway and don't provide any information which are drafts or ‘proforma’.