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[Credit Repair] How to Choose A Merchant Processor

By: Daniel Rosen Last updated: May 4, 2021

Imagine for a moment you’re a credit repair business owner and it’s Thursday afternoon. 

You’ve had an explosively good month so far - your affiliates came through with tons of leads, all your marketing efforts are on point, the phone has been ringing off the hook with people needing your help, and every few minutes you hear your favorite sound… 

The notification that another lead just dropped into your Credit Repair Cloud account… life is good.

 


It’s even better because your team has worked SO hard to crush your sales goals for you. Each team member has kept their cool and gone above and beyond in spite of a CRAZY serge of new customers. 

In fact, you’re so proud of them you’re thinking of adding in a bonus to their paychecks tomorrow. 

After all, they’re the reason you’re able to grow so fast, and you know a couple of your team members are waiting on payday to fix their car, throw a birthday party for their kid, and buy groceries for their family.

So you sit down to transfer your funds from your Paypal and Stripe into your business checking account so you can process payroll for your team - who really are more like family than employees… 

Suddenly, it feels like your stomach dropped to the floor and your blood rushed to your head… 

ALL YOUR MONEY IS BEING HELD by Paypal and Stripe for at least the next 21 days because you violated their terms of service. 

You can’t use even a PENNY of it...

Payroll is due and it doesn’t matter that you had a record-breaking month because NONE of your funds are available to use!... 

WHAT. A. NIGHTMARE. 

And the worst part is… 

It could have been SO EASILY avoided.

Where This Comes From: Recurring Revenue

When you own a credit repair business monthly-recurring payments are the key to profit and growth. 

It’s so simple, you can even make money while you sleep!

How? 

A recurring revenue business is kind of like a subscription where the customers pay every month, like a magazine, or your cell phone bill, cable bill... 

It works like this…

  • If you charge your clients an affordable monthly fee
  • And you give an awesome value, so they continue to pay you
  • And you add a few more clients every month

Your revenue will grow LARGER every month!

For example; if a credit repair business gets 30 clients paying them $99 a month, that’s about $3000 in revenue in the first month. And if that same business just adds 1 new client every day, you can see how quickly that starts to add up. By month 6 your revenue could be over $17,000 a month — and over $33,000 by month 12!  

All a credit repair business owner has to do is add more clients every month to keep the business growing!! 

...AND have a way to legally and ethically process and manage all of those payments. Right?!

Why This Is Important

So, here’s why this is important and how to go about collecting payments:

Understand that credit repair is considered high risk so it’s important to use the right merchant account that allows you to charge for credit repair.

Yes, a MERCHANT ACCOUNT! Not PayPal, or Stripe or square or any 3rd party processors. You need an actual merchant account. 

You NEVER - EVER want to use PayPal, Square, Stripe or other similar services to collect money from your clients! 

These are not Merchant accounts, they are all called “Merchant Aggregators” and aggregate all its seller data into one large merchant account which is not controlled by you!  

I’m so passionate about this topic because I have seen too many horror stories where a ton of hard earned revenue gets frozen, leaving the business owner in a really scary place financially. 

If you’re using any of these 3rd party merchant aggregators and they catch wind of it, they’ll ban you and hold your money… 

And guess what… there’s basically nothing you can do about it! 

Don’t believe me? 

If you read Paypal's terms of service, you will find their stance on “Credit Repair” flat out says “In general, PayPal does not allow Credit Repair or Credit Restoration. In special cases, certain certified organizations may acquire approval via business contract with PayPal.”

So basically… they don’t want anything to do with credit repair organizations but they may make an exception if you jump through the hoops and happen to get a contractual approval.    

I recommend, you just don’t take the risk because really - if they approve of you, then change their minds, or consider you high risk, they freeze your money. 

It may be weeks, or months or in some cases they may keep your funds in limbo or worse - never release your money! 

Even just a couple minutes on Google and you’ll find that Paypal customers have complained for years about the nightmare of trying to regain control over frozen funds. 

They routinely freeze funds for 180 days. 

So, whatever you do, don’t let this happen to you! 

What You Need To Know: 

In order to accept credit card payments, you need a merchant account and a gateway… 

What is a merchant account and what is a gateway?

A merchant account is a type of bank account that allows you to accept credit card payments for your business and the gateway helps facilitate the online transactions and allows you to process them. 

There are a lot of places to get a merchant account, but before you go applying all over town and adding hard inquiries to your personal credit report…

I had a chance to sit down with Tarek Kamal, the owner of 5 Star Processing which many of our #CreditHeroes currently use. He had some great tips to share. 

First, he wanted to make sure you understand that merchant accounts for credit repair businesses are considered high risk, and a little more difficult to get. 

The reason for this is because the clients that credit repair companies interact with often have a high charge-back ratio and reversals so you'll need to find nontraditional payment processing companies specializing in the high-risk sector like 5 Star Processing and some of our other preferred vendors.

There are also a lot of common misconceptions about credit repair merchant accounts that he said you should know about.  

Placing the word “credit repair” in your business name will not prevent you from establishing a merchant account. 

When applying for a merchant account, merchant processors will do their due diligence by going on your website, by looking at the marketing material and taking all the necessary precautions to validate your business. 

So, there is no problem having the word credit repair in your company name.  

Now, in an industry like the credit repair business, you are bound to get chargebacks, it’s not uncommon. However; there are a variety of ways to lessen chargebacks.  

  • Be 100% transparent with your clients. 
  • Offer a money-back guarantee. 
  • Set up some basic automations with client notifications, letting them know ahead of time when they're being billed, how much they're being billed and why they are being billed. 

All these will significantly reduce chargebacks. 

One of the reasons why Credit Repair Cloud recommends 5 Star Processing is they take the time to educate their clients in detail going through the merchant application because it's important to understand it all. 

They have a free class that goes over the required documents, rates, and the entire process and they even help connect your new merchant account with Credit Repair Cloud so you don’t have to. 

To apply for a Merchant Account, visit creditrepaircloud.com/merchant

After You Have Your Merchant Account

Now that you have your merchant account, next you need the ability to automate monthly recurring payments. 

That means you’ll need a recurring payments platform to automate the process.

A recurring payments platform is software that creates the billing plans for your clients and collects monthly recurring payments from your clients. It also sends “dunning” letters when cards decline or are about to expire. 

You can’t automate your credit repair business without this. 

Once you have it all setup, your merchant account will automatically charge your clients each month and deposit the money into your bank account. 

That’s it! 

You're now in business AND can sleep better at night knowing your funds won’t randomly be frozen!

Plus, did you know that each and every one of our Millionaires Club Members process all their millions in revenue through an actual merchant account? 

… Not Stripe, or Paypal, or Square. 

So when you hear rumors or misinformation about how to scam the system, how to use one of these third party processors - you set the record straight and tell them exactly WHY that’s taking on HUGE unnecessary risk! 

And whatever you do - DON’T follow suit! Because now you know better!   

Be a #CreditHero

So if you’re ready to quit your 9-5 and make money in your sleep - all while changing alotta lives, then I want to invite you to join our upcoming Credit Hero Challenge! 

We’ll hold you by the hand as you launch your own credit repair business! We’ve got another one starting in a few days so grab your spot today at creditherochallenge.com

 

Be sure to subscribe on your favorite platform below!

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Topics: Podcast

Transcript

0:00  

Imagine for a moment that you are a credit repair business owner and it's Thursday afternoon. You've had an incredibly great month so far, your affiliates came through with tons of leads, all your marketing efforts have been working perfectly, the phone has been ringing off the hook with people needing your help, and every few minutes, you hear your favorite sound, which is the notification that another lead just dropped into your Credit Repair Cloud account. Life is good. But that's not all. It's even better. Because your team has worked so hard to crush your sales goals for you. Every team member has kept their cool, and they've gone above and beyond, in spite of a crazy surge of new customers. In fact, you are so proud of them, that you're thinking of adding in a little bonus to their paychecks tomorrow. After all, they're the reason you're able to grow so fast. And you know, a couple of your team members are waiting on Pay Day to fix their car, throw a birthday party for their kid and buy groceries for their family. So you sit down to transfer your funds from your PayPal and Stripe into your business checking account so that you can process payroll for your team, who are more like family than employees. And suddenly, it feels like your stomach has dropped to the floor and all your blood is rushed your head because you've just realized all your money is being frozen by PayPal and Stripe because you violated their terms of service. And guess what, you can't even have a penny of it. See, you knew as a credit repair business, that you weren't supposed to use PayPal and Stripe as merchant processors but you heard somewhere that if you name your company, something slick, that doesn't give away the fact that it's credit repair, that you can cheat the system and use them anyways. But now, payroll is due. And it doesn't matter that you just had a record-breaking month, because none of your funds are available. What a nightmare. And the worst thing is, it could have been so easily avoided. But you believed misinformation and rumors, and now you have to tell your team the truth. The good news is, there's a really simple solution to this and a way to guarantee it never ever happens to you. In this episode, I'm going to walk you through everything you need to know to avoid this nightmare situation. So stick around. 

 

So the big question is this. How can we take our passion for helping people with their credit and turn it into a successful business without taking loans without spending a fortune by bootstrapping it from nothing so we can help the most people and still become highly profitable? That is the question, and this podcast will give you the answer. My name is Daniel Rosen, and welcome to Credit Repair Business Secrets.

 

If that story didn't scare you, I don't know what we'll see. It's happening all the time. So many credit heroes in the Credit Repair Cloud Facebook community. They brag about how they're getting away with using PayPal or stripe or square as their merchant processor. But there's a huge problem with that. When you get caught, which you will your account and all your money in it. It can be frozen, meaning you lose all access to your money. When you own a credit repair business, monthly recurring payments are your key to profit and growth. It's really simple. It's so simple, that you can even make money while you sleep. How do you make money while you sleep? Well, a recurring revenue business is kind of like a subscription, where the customer pays every month, like a magazine or your cell phone bill or your cable bill. It works like this. If you charge your clients an affordable monthly fee, and you give an awesome value, so they continue to pay you and then you add a few more clients every month. Your revenue will grow larger every month. For example If a credit repair business gets 30 clients paying them $99 a month, that's about $3,000 in revenue in the very first month. And then, if that same business adds just one new client every day, you can quickly see how that starts to add up. by month six, your revenue could be over $17,000 a month. And by month, 12, over $33,000 a month. Okay, just by adding one new client a month. That's how simple this is. Okay, all you have to do is add clients and be awesome. And then get more clients. See, all a credit repair business owner has to do is add more clients every month to keep the business growing. Oh, and have a way to legally and ethically process and manage all of those payments, right? So here's why this is important. And here's how to go about collecting payments the right way. For starters, understand that credit repair is considered high risk. So it's important to use the right merchant account that allows you to charge for credit repair. Yes, merchant account, okay, not PayPal, or stripe or square or any other third party processors, you need an actual merchant account. You never ever want to use PayPal square stripe or any other similar service to collect money from your clients. Okay, first of all, those are not merchant accounts at all. Okay? They are merchant aggregators, and they have Terms of Service, and they do not allow credit repair period, okay. They don't matter what you name your business, they do not allow credit repair. Okay, so you cannot sneak around the rules, you have to get the right tools. I'm hoping that you really hear me, because I have seen so many horror stories where a ton of hard earned revenue gets frozen, leaving the business owner in a really, really scary place. So if you are using any of these third party merchant aggregators, and they catch wind of it, which they will, they will ban you, and they will hold your money. And guess what, there is nothing you can do about it. Don't believe me? Well, if you read pay pals Terms of Service, you'll see what they say about credit repair it flat out says PayPal does not allow credit repair or credit restoration. So I recommend that you don't take that risk. Okay, because eventually they're going to find out what you're doing. Some customer of yours will file a chargeback. Or which happens, okay, there's no way around that either. It just happens with any business at all. Okay, you could sell pillows, okay, harmless pillows. And one day, you're going to get a chargeback, it just happens, okay? Or they'll decide to do a random audit. And then when they discover that you're doing credit repair, which they don't allow, you know, they're going to freeze your money. And it could be months, that they'll keep your funds in limbo, or even worse, they might never release your money. If you spend a couple minutes on Google search in this, you'll find that PayPal customers have complained for years about the nightmare of trying to get a hold of their frozen funds. Okay, PayPal routinely freezes funds for 180 days. That's six months. So whatever you do, don't let this happen to you. Here's what you need to know. In order to accept credit card payments from your clients. You need to do it the right way. You can't cut corners and look for shortcuts around rules. You need the proper tools. You need a merchant account that allows for credit repair and you need a gateway. So what is a merchant account? And what is a gateway? Well, a merchant account is a type of bank account. That allows you to accept credit card payments for your business. And then the gateway helps facilitate the online transactions and allows you to process them. If you're not sure where to find a merchant account, that allows for a credit repair, just visit our site, go to Credit Repair Cloud.com slash merchant. Okay, and on that page, we have two companies there that will love to help your credit repair business. Okay, and I just had a chance to talk with Rick Kemal, who is the owner of five star processing, which is a company that many of our credit heroes currently use. Okay, they are awesome. And Rick is really helpful for credit heroes because he used to have a credit repair business. But now he provides merchant accounts for credit heroes, and he had some really important tips to share. First, he wanted to make sure that you understand that merchant accounts for a credit repair business are considered high risk, and they are a little more difficult to get. The reason for this is because the clients that credit repair companies interact with often have a high chargeback ratio and reversals. So you'll need to find non traditional payment processing companies specializing in the high risk sector like five star processing does and some of our other preferred vendors. Now, there are a lot of common misconceptions about credit repair merchant accounts that he said you should know about. First of all, placing the word credit repair in your business name, it will not prevent you from establishing a merchant account. When applying for a merchant account, merchant processors, they must do their due diligence by going through your website by looking at your marketing material by looking at your client agreement. And by taking all the necessary precautions to validate your business. So there is no problem having the word credit repair in your company name. Okay, I want to say that one more time because people post all kinds of misinformation about this in our community. So you heard it from me, there is no issue with having the word credit repair in your company name. Okay. Now, in an industry like the credit repair business, you are bound to get chargebacks Okay, it's not uncommon. Okay. However, there are many ways to reduce chargebacks. So first and foremost, you always, always need to be 100% transparent with your clients, and you need to offer a money back guarantee. Okay, a lot of new credit repair business owners freak out when they hear you have to have a money back guarantee. So here's a simple rule. Okay. And I learned this the hard way, the simple rule is, if you offer a money back guarantee, you're going to get more customers, okay? So you don't need to worry about this, okay? You need to have a money back guarantee and honor it. Okay? Okay, if you're good at what you do, you're going to have a very, very, very small percentage of chargebacks. Okay, so you want to focus on being awesome, being transparent. If a customer does have an issue, give them their money back. Okay, if a customer has a bad experience, you have to give them a refund. Okay, they're gonna get it anyways. Okay, but they're going to get it by filing a chargeback. And then you get fined on top of giving back the money and you risk losing your merchant account if you get too many of those. Okay? So just give them the money if they want it. Okay, that's going to reduce chargebacks. And then last but not least, set up some basic automations with client notifications, letting your clients know ahead of time when they're being billed, and let them know how much they're being billed and why they're being billed. This will all significantly reduce chargebacks. Okay, and one of the reasons why I recommend five star processing is that they take the time to educate their clients in detail while going through the merchant application because it's efficient. Understand what you're getting into, okay, they have a free class that goes over all the required documents, the rates, and the entire process, they make it very, very, very easy. And they even help you to connect your new merchant account with Credit Repair Cloud. So you don't have to, they help you set up all the technical stuff with your site with your authorized dotnet with CHARGE be of use charged me, which we recommend, and everything having to do with your Credit Repair Cloud. So they take away all the worry about all the technical they're, they're really an awesome company anyways, to get a merchant account, visit, creditrepaircloud.com/merchant. And then you can apply right from there. It's really really easy creditrepaircloud.com/merchant. Okay, so moving on, now that you have your merchant account. Next, you'll need the ability to automate your monthly recurring payments. So for that, you'll need a recurring payments platform to automate the process. Credit Repair Cloud is integrated with CHARGE fi, which is the most affordable payments platform I've ever seen. A charge B launch plan is free, it's completely free for the first $10,000 in processing. So you can try it out plenty to see if you like it. And I know you're going to love it. And that's all you need to get started. It's important to note that chargebee is the only payment software that works within Credit Repair Cloud, we have built this amazing integration with them that makes getting your client payments easy. And once it's all set up, your clients can sign up on your website with a credit card, and they're automatically added to your software with their payments triggered by events in Credit Repair Cloud, I recommend that you automatically trigger the first monthly client payment after their round one letters have been created and saved. Now once you have it all set up, your merchant account will automatically charge your clients every month and deposit that money into your bank account. And that's it. And you're now in business. And you can sleep better at night knowing that your funds won't randomly be frozen. And did you know that each and every one of our Millionaires Club members process all their millions in revenue through an actual merchant account. They don't use Stripe or PayPal or Square, they use an actual merchant account. So when you hear rumors, or misinformation about how to scam the system, how to get around the rules of these services, and how to use one of these third-party processors well, you can set the record straight and tell them exactly why that's wrong, and why that's taking on huge unnecessary risk. And whatever you do, don't take that risk yourself. Because now you know better. So if you're ready to quit your nine to five, and make money in your sleep, all while changing a whole lot of lives, then I want to invite you to join me in our upcoming Credit Hero Challenge. I will hold you by the hand as he launched your very own credit repair business. We've got another challenge starting in just a couple of days. So grab your spot right now at creditherochallenge.com. And if you're finding value in the things I'm sharing on this podcast, click below to subscribe, okay? I don't want you to miss any episodes. And if you're feeling kind, rate me and give me a review, because this is a new podcast and I can use all the help I can get. And I will see you on the next episode. So until then, keep changing lives.

 

Hey, everybody, it's Daniel again. And really quick, I'd like to invite you to join what I believe is the best thing we have ever created inside the Credit Repair Cloud Community. And it is a challenge that we call the Credit Hero Challenge. If you're just planning out your business or you're just getting started, and you dream of having a successful business your own, so you can quit your nine to five and fire your boss and have financial freedom, or so you can add another revenue stream to your existing business, if that's your dream, you need to get into this challenge. We created this challenge to help you to create and launch your very own credit repair business. To build a proper foundation for a really successful business. This challenge is going to help you to understand the strategy, the tactics and all the things you need to be successful at credit repair. It really is the greatest thing we have ever built, and it will change your life. So I recommend you do it right now. Stop everything, pause this audio, go online, and go to creditherochallenge.com. That's creditherochallenge.com and join the next challenge. And there's a challenge that's starting in just a few days. So go get started right now at creditherochallenge.com.

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