Finding a merchant account for an insurance company

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Libby James
Merchant Services Expert

Libby James is co-founder, director and an expert in all things merchant services. Libby is the go-to specialist for business with more complex requirements or businesses that are struggling to find a provider that will accept them. Libby is regularly cited in trade, national and international media.

Merchant accounts for insurance and extended warrantee companies

Looking for the best payment gateway for insurance companies? Here we take a look at what to expect when shopping around, why insurance businesses can be deemed high risk and how to find the most suitable payment processing for an insurance or extended warrantee business.

Payment processing for insurance and extended warrantee companies

In recent years, there has been an increase of companies offering additional cover or insurance for high ticket goods. Examples include; boilers, drainage, tech such as TV’s and mobile phones and household white goods. However, sourcing suitable card payment solutions for these companies can be problematic, especially when some are new start-ups. There is no doubt that there is huge profit to be made within the sector, so how do you find suitable processing to accompany the growing industry? Let’s take a look…

High risk merchant accounts for insurance business

Insurance is deemed high risk by many high street banks, so your search for processing is a little more complex and limited options are available. The reason insurance companies struggle to obtain card payment facilities is due to the number of chargebacks historically associated with subscription payments, customers often taking out additional cover for a product without knowingly doing so and therefore raising a chargeback against the merchant.

Another reason for insurance/warrantee companies being considered as high risk by acquiring banks is the amount of fraud carried out within the sector. Therefore, when approaching card processors, it’s important to look at banks who have accepted merchant account applications for insurance companies previously AND have an appetite for this level of risk moving forward.

Cost of high-risk merchant accounts for insurance and warrantee companies

Due to the high-risk nature of these types of accounts, there is no doubt that transaction costs will increase slightly. With limited options to choose from (especially for start-ups) it would be wise to expect to pay an application fee to your bank or broker and higher than average costs per transaction. Often these can be negotiated depending on the volume of payments you expect to accept, with some companies offering reduced costs after a six-month period.

Rolling Reserve for high risk accounts

Banks often counterbalance the risk of onboarding insurance/warrantee companies by attaching a rolling reserve to the account. This means that a proportion of the funds the business takes are held on account and released later than regular payments. This reserve acts as a deposit, meaning the business will receive the funds eventually whist preventing chargebacks and fraud claims in the longer-term.

Served notice by your existing card provider?

It’s common within high risk industries to receive notice of termination from the merchant bank. This is because acquiring banks are constantly trying to balance their risk portfolio, meaning although they were happy to accept applications from insurance companies originally, their criteria have now been adjusted meaning they move away from the industry. Finding alternative card payment solutions, with solid processing history, doesn’t have to be complex. Speak to our advisors today – we’re happy to help.


How Merchant Advice Service can help

Merchant Advice Service work closely with banks and brokers who can help find suitable card processing for insurance companies. Together we cover a wide range of products to include, high risk payment gateways for e-commerce, virtual terminals, chip and pin facilities, and MOTO accounts for telephone payments. Our service is free of charge so why not speak to us today?

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Libby James

Libby James Co-founded Merchant Advice Service alongside David Bird in 2016. Her finance background, coupled with retail and customer service experience, gave Libby the drive to bring transparency and non-biased advice to the world of merchant services. Having come from the heavily regulated mortgage and insurance industry, Libby found it puzzling that other financial sectors lacked regulation and transparency leaving customers confused and unable to make informed decisions when it came to accepting card payments. This was soon to become Libby’s obsession!

With the help of some of the industry’s best, Libby began to research acquiring banks, complex terminology/regulation, and the problems customers experience within merchant services and payment gateway markets. She spent years on sourcing solutions for complex clients, which previously others were unable to assist with. Libby established relationships with brokers and banks which would soon form the cornerstone of Merchant Advice Service. As a result Libby has been featured in high-profile publications across the web.

Libby is proud to be the entrepreneur’s champion, supporting start-up businesses regularly. Her industry insights can often be found on LinkedIn where she provides free of charge advice and money saving pointers. It’s safe to say she has her finger on the pulse of everything card payments related.

Libby speaks of her experience in founding and running Merchant Advice Service…

‘Merchant Advice Service is one of my greatest achievements to date. We help business owners to overcome card processing issues which can become detrimental to their business. We assist SME’s in finding suitable card payments solutions, helping them create their vision. Each and every day is different, exciting and fore filling. As technology advances I can’t wait to see the way in which the merchant services market advances, and I’m pleased that our business will play a part in educating company owners along the way.’

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