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Get Your Own MLM Merchant Account- A Comprehensive Guide

Read Time: 5 min

Since the 1980s, multilevel marketing (MLM) companies have skyrocketed in popularity. It is an easy thing for people to do in their spare time and make extra cash. What you didn’t know is that many distributors and sellers in the industry are missing out on big profits. Without MLM merchant services, these businesses are cutting their profit capability in half. But what is merchant services and how can it increase your earnings by so much? The short answer is that a merchant account for MLM allows you to accept debit and credit cards online, in person, over the phone, and through the mail.

If you have a multilevel marketing business, you’ll need a merchant account.

Why You Need an MLM Merchant Account

Before the internet and online shopping was so accessible and common, MLM businesses used to rely on door-to-door sales and shopping parties. MLM individual contributors would sell their product to strangers or invite their family and friends to parties where they could see and try the product. And this was an effective recruitment tactic… at the time.

Now, consumer trends heavily towards online shopping and social media. So, MLM’s have shifted to become eCommerce merchants with social media sales and “parties” online, rather than traditional face-to-face sales.

This is where a merchant account comes in handy. MLM businesses now need virtual payment terminals so that their customers can go online and order products, payment gateways so the sales team can key in MOTO business and a full shopping cart on their website. None of that would be possible without a merchant account for multilevel marketing.

Risks With Multilevel Marketing Businesses

MLM sales team

With this shift to online ecommerce, many more risk factors have come into play including:

  • The legitimacy of the business
  • Chargebacks and fraud
  • Online business

Legitimacy of the business

Many individuals fear that MLM businesses are fraudulent or of low quality. This may be the case sometimes, but more often than not it couldn’t be further from the truth. Because of this stigma, banks and merchant service providers are a tougher critic on businesses of this type. They hold MLMs to higher standards and compliance procedures.

To help with this factor, make sure that you are selling exactly what you’re advertising. Encourage your customers to write reviews after using their product and listen to customer feedback.

While you may mitigate the risk of your business being called illegitimate, the stigma of the industry as a whole remains. It is one of the reasons many standard payment processors and banks refuse to accept MLM businesses.

Chargebacks and fraud

MLM businesses are highly vulnerable to chargebacks and fraudulent charges. An unhappy customer may perform a chargeback on their credit card or claim that the charge was fraudulent. If this happens too many times, your bank could freeze or even close your account. 

To prevent this from happening, you’ll want a chargeback protection screening software that notifies you of the chargeback as soon as it happens. That gives you time to step in and handle it before the bank is involved. In addition to that credit card, fraud prevention for merchants will be imperative to the success of your company as you expand and grow.

Online Business

There are a variety of risks associated with online businesses. These risks include data hacking and breaches, chargebacks, and more. But, the main reason banks don’t like to work with online business owners is because they are harder to track down in the case of any issue.

With a brick-and-mortar location, the bank has a physical address that they can use to reach the business owner – this is not always the case with online businesses. So, many banks simply refuse to take on these businesses as it is seen as unnecessarily risky.

How to Get Your Own MLM Merchant Account

Due to the issues outlined above, multilevel marketing businesses are considered high risk by most banks and standard payment processors. This means that you will have a hard time finding a processor that can (1) support your business, and (2) protect it from unnecessary risks. 

online merchant account

The best way to start going about getting a merchant account, then, is to find high risk credit card processors that already know your business type. You will get all of the perks with much less risk – a win for everyone involved.

In order to start the process of implementing your multilevel marketing merchant account, you will need to choose your provider.

1. Choose your merchant account provider

Take a look at what each high risk MLM merchant account provider offers.

Now, these are just the basics, but being able to vet out what your business wants and needs will be a great first step.

Now that you have done the hard part, the next step is to actually apply with that provider.

2. Apply for multilevel marketing merchant services

Applying for something of this scale may sound complicated, but luckily it shouldn’t be.

First, get the following information together:

  • Personal Details: Name, business/personal address, contact information, SSN or EIN, and government issued ID
  • Business Details: Business URL, contact information from your site, return policy, full color credit card logos (from the checkout page)
  • Banking Details: Routing/account numbers, three months of personal or business bank statements, depending on which account you want the deposits into, voided check or bank letter

With all of this in hand before you begin, you will be able to get an approval quickly. Just be aware that a high risk application is going to take a few days so that the bank can do their underwriting process and support your business properly. And don’t be dismayed if they come back with stipulations. They are only for the health and well being of your business.

You will be able to take advantage of your MLM merchant account as soon as you are approved and integrated which means that you can begin providing the best products and services to your happy customers.

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