Online Furniture Business: Payment Provider Switching & Cost Review Case Study
04 July 2023
Written by Libby James
Libby James is the founder and Managing Director of Merchant Advice Service. Since 2016, she has worked directly with businesses and payment providers across merchant accounts, card processing, payment gateways and complex provider requirements.
Libby specialises in high-risk, declined and harder-to-place merchants, as well as businesses requiring specialist payment methods, integrations or international support. She writes and reviews Merchant Advice Service content, drawing on practical experience gained from real merchant enquiries and provider relationships.
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Case study summary
An online furniture business contacted Merchant Advice Service after a high-street payment provider declined its application at an important stage in the company's development.
The business needed an alternative payment-processing route, but the requirement was broader than simply finding another provider willing to consider the application.
Merchant Advice Service reviewed the circumstances and identified an alternative payment provider within approximately 48 hours. The client subsequently reported that the new arrangement also offered better processing rates.
The business
The client operated an online furniture business.
Furniture businesses can have payment requirements that differ from lower-value or immediately fulfilled retail transactions.
Depending on the individual business, relevant considerations can include:
- higher average transaction values
- online card payments
- made-to-order or bespoke products
- delivery lead times
- deposits and balance payments
- refunds and cancellations
- chargeback exposure
- the time between payment and fulfilment.
These factors can influence how different payment providers assess a furniture merchant.
The problem
The business had approached a high-street payment-processing provider but its application was declined.
This happened at an important point for the company and created an urgent need to identify another payment route.
A decline by one provider does not automatically mean that every payment provider will reach the same decision.
Providers have different underwriting policies, sector appetites, pricing structures and approaches to commercial risk.
The challenge was therefore to identify a provider whose requirements were potentially better aligned with the way the furniture business operated.
How the business found Merchant Advice Service
The client found Merchant Advice Service through the MAS website after reading information about payment processing for furniture and homeware businesses.
The business then contacted MAS for help understanding its alternative payment-provider options.
What Merchant Advice Service identified
Merchant Advice Service reviewed the business and the circumstances surrounding the previous application.
Rather than simply submitting another application without considering provider suitability, the aim was to identify a payment route that better reflected the merchant's actual requirements.
Factors relevant to a furniture merchant can include:
- business model
- products sold
- transaction values
- processing volumes
- online payment requirements
- delivery and fulfilment periods
- refund and cancellation policies
- processing history
- provider sector appetite
- commercial terms.
The provider route
Merchant Advice Service identified an alternative payment-processing provider for the business within approximately 48 hours.
The alternative provider assessed the business differently from the provider that had declined the earlier application.
The client also reported that the commercial rates available through the new arrangement were better than those associated with its previous payment-processing setup.
The payment provider remained responsible for its own underwriting, due diligence, pricing, contractual terms and final account decision.
Reviewing payment costs as the business developed
The relationship with Merchant Advice Service continued after the initial payment-processing issue was resolved.
As the furniture business developed, MAS subsequently helped the client identify relationships with two further financial institutions.
The client reported that these arrangements helped the business reduce costs and supported its continued growth.
This illustrates why payment-provider comparison does not necessarily need to be a one-off exercise.
A payment arrangement that is appropriate at one stage of a company's development may need to be reviewed as processing volumes, transaction values, sales channels or wider commercial requirements change.
Payment costs are only one part of provider selection
In this case, the client reported an improvement in rates, but price was not the only issue that needed solving.
The business first needed a payment provider capable of considering its business model.
When comparing payment providers, businesses may therefore need to assess:
- provider eligibility
- transaction pricing
- fixed processing fees
- gateway charges
- settlement
- contract terms
- refund and chargeback costs
- technical requirements
- service and support
- whether the arrangement remains suitable as the business grows.
Businesses reviewing their current processing costs can also read How to Understand Your Card Provider's Transaction Statements.
Customer feedback
The business subsequently provided detailed positive feedback about its experience with Merchant Advice Service.
The client explained that MAS had found another provider within 48 hours and that the new payment-processing rates were better.
“After 48 hours Libby found us another company that were much better than our existing provider.”
The customer also reported that subsequent introductions helped save the business money and supported its growth.
Merchant Advice Service view
This case demonstrates the difference between simply applying to another payment provider and reviewing provider suitability properly.
The initial problem was an application decline, but the eventual outcome involved several different considerations:
- finding a provider willing to assess the furniture business
- understanding differences in provider appetite
- reviewing commercial rates
- considering the payment relationship as the business developed.
For established businesses, changing provider can also create an opportunity to review whether an existing payment arrangement still represents good value and remains appropriate for the way the company now operates.
This applies to mainstream businesses as well as merchants with more specialist payment requirements.
What this case demonstrates
- A provider decline is not necessarily a market-wide decision. Different payment providers can assess the same business differently.
- Sector knowledge can help narrow the search. Transaction values, fulfilment and the business model can influence which providers are relevant.
- Provider comparison can include cost. Once suitable providers have been identified, pricing and commercial terms can also be reviewed.
- Payment requirements change as businesses grow. Existing arrangements can be reviewed as volumes and commercial requirements develop.
- Price should not be considered in isolation. Provider suitability, underwriting, settlement, contracts and service can all matter alongside the headline rate.
Payment processing for furniture businesses
Merchant Advice Service publishes guidance for furniture and homeware businesses comparing merchant accounts and payment providers.
Read Merchant Accounts for Furniture Shops for more information about the issues providers may consider when assessing furniture merchants.
Switching and comparing payment providers
Businesses do not need to wait until a payment provider declines an application or ends an existing arrangement before reviewing their options.
A provider review can also be useful where a business has grown, its payment requirements have changed or it wants to understand whether its current commercial arrangement remains appropriate.
Read Switching Merchant Provider or Compare UK Payment Providers for further information.
About Merchant Advice Service
Merchant Advice Service is an independent UK business-to-business payments information, comparison and provider-matching service founded by Libby James in 2016.
MAS helps businesses understand their payment requirements and identify payment providers or specialist partners that may be relevant to the way they operate.
Its areas of payments coverage include merchant accounts, payment gateways, ecommerce payments, provider selection, switching providers, integrated payments, international payments, recurring payments, merchant finance and more complex payment requirements.
Merchant Advice Service is not an acquiring bank or payment processor and does not make final merchant-account underwriting decisions.
The MAS information, matching and introduction service is free to businesses. MAS may receive commission or a referral fee from some commercial partners where an introduction results in a completed product or account.
Read How Merchant Advice Service Works for more information about provider matching and the MAS commercial model.
