Free Trial Offer Merchant Account

Free trial merchant accounts are a requirement for all negative option businesses. Banks and payment processors have categorized these businesses as high risk because of the selling model that is used. A free trial provides a product or service to the customer at a discounted rate or price initially in order to gain the business. In the near future the product or service pricing is raised to the original price point. This is very risky because the customer receives a recurring billing (usually monthly) on their credit card or debit card. If the merchant wants to cancel, they must contact the merchant. Free trial businesses usually use unclear terms and condition pages that must customers do not read. This again makes the free trial business high risk.

What is negative option? Negative option is the requirement of the customer to contact the company they purchased the free trial or discounted trial to discontinue and cancel the recurring membership, product or other service. Negative option is part of any recurring billing sales model. The free trial entices the customer into purchasing the product or service that they would normally not purchase. The issue with this sales model is the customer has to contact the company in order to cancel and if the business does not operate a full time customer service correctly, they will have customers unable to reach the business that will instead of canceling the membership they will call their credit card or debit card company and chargeback the charge(s).

How easy is approval and where do you apply? Approval can be difficult if your free trial business is a start up without any processing history. Since the product or service being sold is not a onetime sale, the payment processor and bank must be confident with the company to make sure they are able to service the membership or product being sold after the sales date since it recurs regularly. If your business already has payment processing history it will be much easier.

Contact one of our helpful account representatives to assist you in the setup of a high risk merchant account or offshore merchant account for a high risk merchant.

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