WooCommerce is one of the most popular shopping platforms for those looking to start an eCommerce business. The WooCommerce merchant account platform offers many tools for business owners that allow them to get their stores up and running quickly.
Certain high-risk businesses have found WooCommerce to be attractive for getting their online shop set up to accept customers fast. However, businesses that try to use WooCommerce merchant accounts to accept high-risk payments put themselves at risk of losing their account.
Not only that, even low-risk merchants may find themselves in violation of certain WooCommerce regulations regarding payments without even knowing it. This can lead to them also losing their WooCommerce merchant account.
When this happens, it’s usually without warning and businesses face a severe threat as they now scramble to find solutions while their business is unable to accept payments from customers.
Below, we’ll explain how WooCommerce merchant accounts work and why people end up losing their accounts. We’ll also offer solutions for high-risk merchants and other merchants so they can have more control over their payment processing.
How WooCommerce Merchant Accounts Work
When you build a store on the WooCommerce platform, it offers an opportunity to use the WooCommerce payment gateways. They call it a merchant account. At first, it seems like a good solution as the shopping platform and the merchant account would be fully integrated.
But there are some huge issues for businesses who go with the default WooCommerce payment options and these issues can threaten their operations and ability to accept payments.
The first issue is that the WooCommerce merchant accounts are aggregate merchant accounts. This means that merchants all pool transactions with other businesses on the platform. The WooCommerce payment processors combine these aggregated accounts behind the scenes. Most merchants aren’t even aware of this.
But in essence, when you use WooCommerce as your merchant account, you are essentially sharing a merchant account with everybody else on the platform.
It allows the payment processors involved with WooCommerce to also pool their risk, which acts as a hedge. Because of this, they have a rather faster approval process. This makes businesses feel confident they have a merchant account in place that they can rely on.
But in reality, WooCommerce can audit your store and products at any time and close your account for any reason if they deem you to be high-risk.
Downsides of Using WooCommerce Payment Aggregators
WooCommerce payment aggregators seem like a great option when you first sign up and receive approval. But the problems begin to show up shortly after that when you realize these are not true merchant accounts.
Lack of Control
The main issue with using aggregate merchant accounts to accept credit cards is that you have very little control over your business. Accepting payments from customers via different payment methods is the lifeblood of your business – it’s how your business makes money. Not having control over this critical aspect of your business and growth is almost like letting a stranger be the CFO of your company.
One-sided Merchant Agreements
Another issue with WooCommerce merchant accounts is that the agreement is incredibly one-sided. They can essentially close your account or freeze your funds for almost any reason. When this happens, you have a very limited recourse. Essentially, you have to go through their process just to get your funds back.
It’s not a good spot to be in when your account has been closed and you have to wait days for a response and your business is losing money each day.
Funds Are Deposited into a Pool First
The reason they can freeze your funds is that money from the sales of your products goes into a pool first. It is then distributed to your account. From there, you can withdraw them to your business bank account. This is why you have far less control over your own money as you don’t really receive it when you think you do.
Overall, this gives WooCommerce and its aggregate payment processor far too much control over the fate of your business, with little recourse if you feel they are in the wrong for closing your account.
The Solution To WooCommerce Dropping Your Merchant Account
The solution to this problem is rather simple and it is available to virtually every merchant.
The solution is to obtain your own personalized merchant account through a payment processor such as ECS Payments. These offer WooCommerce payments support with many added benefits for your business. Integration is also very easy. You can achieve integration with plugins similar to the WooCommerce Bank of America plugin or the Authorize.net plugin.
When you have your own merchant account, you now have full control of your business and payment processing. You no longer have to share a merchant account among thousands of other merchants on the platform.
For high-risk merchants, this is completely necessary. Without a dedicated high-risk merchant account, WooCommerce will almost certainly drop you if you try to fly under the radar. Other mainstream gateway options like Paypal Pro or Stripe will also not work with high-risk products.
Once dropped by a payment processor for selling restricted products, you will have a harder time obtaining a new merchant account elsewhere, even if you do everything right.
It benefits all businesses to get started on the right foot. Choose a dedicated merchant account over an aggregate payment service, such as those offered by WooCommerce and other platforms.
WooCommerce High-Risk Vs ECS High-Risk Merchant Account
It’s important to understand that WooCommerce merchant services are not a true high-risk processor or merchant account provider. Because they pool risk, they generally accept most applications immediately without doing any real underwriting.
This means when merchants are not completely honest when they apply through WooCommerce, they are generally approved and start selling. However, WooCommerce will eventually flag these merchants and freeze their accounts before long.
This means that anyone selling high-risk products on WooCommerce needs a true high-risk merchant account like one from ECS Payments.
Below are some benefits and differences when using ECS Payments.
Your Own Merchant Account
When you go through ECS Payments for your high-risk merchant account, you have your own account. You are not pooled with other merchants and your funds are never pooled with other businesses.
When transactions are authorized and settled, the money is deposited into your own merchant account. Which you can then transfer to the bank account of your choice.
Knowledge of Your Industry
ECS Payments is a leader in high-risk processing and has worked with merchants in virtually every industry deemed high-risk by card companies. This means they know exactly how to get your account underwritten and approved with the highest possibility of paying the best rates and with the best terms.
ECS Payments can also work with your business if you’ve had difficulty in the past getting approved. Because of our relationships with various banks, we can find ways to get you approved.
Aggregate payment processors like WooCommerce do not offer anything close to this level of personalized service.
WooCommerce Support vs ECS Payments Customer Support
Customer support is critical when it comes to payment processing. Problems with accepting payments mean your business could be losing money until it’s resolved. When you have your own high-risk merchant account through ECS Payments, you have access to dedicated in-house support specialists who know your business and your industry.
With aggregate payment processors or WooCommerce, you have no direct contact for support. Most support is email-based, which can take a day or longer to get a response. Worse yet, customers are sometimes told to visit WooCommerce forums for assistance.
If you’re running a serious business, this lack of support should be a dealbreaker.
WooCommerce Fees Vs ECS Payments Fees
What’s most confusing about aggregate payment systems like WooCommerce is that you would think with the lower service and their ability to pool merchants, the transaction fees would at least be lower.
But this isn’t the case, fees are often higher when you add everything up. Over the long run, a company like ECS Payments that specialize in high-risk can get you better terms than you will get with other solutions.
By working with different banks and understanding your business’s processing needs, ECS Payments works to find you the best underwriting options with the lowest fees possible for your situation.
WooCommerce Gateway vs ECS Payments Gateways
The WooCommerce high-risk payment gateway you use is a critical part of your entire transaction flow when processing payments. All information is handled by the payment gateway and the amount of access merchants have to the gateway allows them to have more payment options.
With WooCommerce, you only have one option and that’s to use their default gateways. With ECS Payments, you get access to different gateways and can choose which one works best for you. Not only that, you have access to several gateways that allow high-risk merchants.
Since there is no one best payment gateway for WooCommerce, having the option between several gateways means you can find the right option for your unique situation and billing needs
For example, the WooCommerce NMI gateway combination is popular with many high-risk merchants. The NMI gateway is only available through payment processors like ECS Payments, and not directly through WooCommerce.
More Tools For Your Business
With the default WooCommerce payment integrations, you have limited payment solutions since they have to tailor what they offer to everybody. That means they can’t offer specific solutions to individual businesses when needed.
When you work with a trusted payment processor to secure your own merchant account, you have access to all the additional tools and options they offer for complete payment solutions. Things like customer vaulting to store customer credit card details or other beneficial online payment solutions.
With your own merchant account, you can also easily expand into a retail location and utilize options such as Apple Pay or other mobile POS payment technologies.
What Does WooCommerce Consider High-Risk?
As we explained, WooCommerce doesn’t allow the sale of high-risk products with their own default payment solutions or merchant accounts.
Some sites may be able to get quick approval and start selling by flying under the radar. But WooCommerce will shut down these sites rather quickly. Sometimes, this happens simply because the merchants don’t know what products are high-risk.
High-risk products and services are those that card issuers and banks have determined have a higher rate of chargebacks, fraud, and returns. It doesn’t mean the products themselves pose a high-risk risk to customers. It’s simply that processing payments for those items is a higher risk for the banks and institutions involved.
Below are the most popular industries that WooCommerce considers high-risk and will not process for.
- CBD or cannabis products
- Adult products or services
- Drugs (which can include e-cigarettes and vapes)
- Nutraceuticals and nootropics
- Multi-level marketing (MLM) businesses
- Social media promotion
- Firearms including firearm ammunition
- Credit Repair
- Virtual currencies
- Coaching or mentoring services
- Counterfeit items
The list above shows the most common high-risk products and services that WooCommerce prohibits. However, there can be others and due to the agreement that businesses enter into with WooCommerce payments, they can add or change this at any time and without warning.
WooCommerce can also deem you high-risk even if the product you sell is not on this list if you happen to go over certain thresholds for chargebacks or returns. They often do not clearly communicate these thresholds, as they would be for a true merchant account like those offered by ECS Payments.
WooCommerce ACH Vs ECS ACH
Some businesses may need to use ACH payments. ACH is a better fit for certain transaction types. It also has a lower fee structure in some payment situations.
WooCommerce does offer ACH solutions through their WooCommerce payment gateway list of aggregate providers. But these have the same restrictions and drawbacks as their credit card processing solutions.
For starters, they don’t allow high-risk products or transactions. So if you are a high-risk merchant, you may experience the closure of your merchant account or frozen funds when using the WooCommerce ACH services.
If you’re a low-risk merchant, you can still use the WooCommerce ACH services. You should have no major issues if you follow all of their guidelines. However, you will still be at the whim of WooCommerce or Stripe and whatever changes they make to their policies can immediately impact your business.
If you are currently processing ACH payments through WooCommerce or one of their partner providers, consider moving to your own merchant account. The change will be seamless for your customers and you will set your business up to be far more independent in the future.
This is especially true as your business grows. You essentially put all your eggs in one basket when you tie yourself into one integrated payment ecosystem like WooCommerce and Stripe. When it works, things seem fine. But if there is ever an issue, your business can be in jeopardy and left with few options to quickly continue accepting payments.
WooCommerce Has Dropped Your Merchant Account, Now What?
Unfortunately, many merchants don’t research these topics until an issue with an aggregate payment service has already come up. In most cases, WooCommerce or Stripe send a merchant a notice informing them they have violated certain policies and now their ability to process payments has been halted.
Below are steps you can take if WooCommerce has dropped your merchant account or banned your WooCommerce store.
Follow Their Instructions
It’s not likely, but you may be able to get your account reinstated. Usually, when an account is terminated, there is little recourse for merchants. The process may also take longer than what the business can while not accepting payments. For example, if the process takes several weeks, you may already be out of business by then since you can’t earn any money.
So read the notification carefully to see if there is a fast solution offered. If not, you need to move on to getting your own high-risk merchant account through a trusted payment processor.
Gather Your Business Information.
You’ll need to apply to a payment processor for your merchant account. To make the process as fast as possible, you’ll want all your information regarding your business on hand to speed up the process.
For example, things like your monthly processing volumes and ticket amounts will be something your new payment provider will want to know. This is how they assess your risk and secure your underwriting.
You’ll also need your bank account and information so that it can be verified during the application process.
By having all of this ready, you can really speed up the application process and reduce the time before being able to accept payments again.
Choose and Apply to a Payment Processor
You’ll want to make sure you select a trusted payment processor with years of experience in high-risk industries as well as WooCommerce itself. ECS Payments has been helping merchants around the country secure high-risk merchant accounts even after they’ve been dropped by WooComerce or other providers. They work with different banks and can underwrite high-risk accounts in as little as a few days.
ECS Payments also offers access to several different payment gateways. This means that with your new merchant account, you’ll likely have enhanced features over your previous WooCommerce account. These features can save you both time and money when processing payments and can also help you improve customer satisfaction.
Integrating A WooCommerce Merchant Account Vs an ECS Payment Merchant Account
Many merchants think that switching merchant accounts when using WooCommerce will upset their business and be a technical challenge. However, this couldn’t be further from the truth.
Switching to your own merchant account such as with ECS Payments is easy and requires no technical knowledge or coding.
After you have secured your merchant account with ECS Payments, you simply use a WooCommerce plugin to integrate it into your store. If you already use WooCommerce, you are already familiar with plugins or extensions used on the platform. For example, the Bank of America WooCommerce plugin and other similar extensions.
As an example, if you decided to use the Authorize.net gateway when setting up your new merchant account, you simply install the appropriate Authorize.net shopping cart plugin in WooCommerce.
From there, the plugin will request your API keys. These can be easily found by logging into your new merchant account and Authorize.net merchant dashboard.
Under the account settings, you can select to create new transaction keys. You simply enter these keys and credentials into the plugin and now your eCommerce store is set up with your new gateway and merchant account.
You can begin accepting payment immediately from that point on. If you have any issues during this process, the support specialists at ECS Payments can walk you through the entire process and troubleshoot any issues you may have.
What If You’re Not Allowed On The WooCommerce Platform?
It’s possible that not only was your merchant account on WooCommerce deactivated, but you are no longer allowed to sell on the hosted platform at all, even with a new merchant account.
In this case, you can still use WooCommerce. The only difference is you have to host it yourself on a web host of your choice.
WooCommerce is open-source software and works with WordPress, which is also open-source. This means you can use the full version of the software for free on your own hosting services, such as GoDaddy or any other popular hosting company.
Once installed on your own server, the software will work exactly as it does when hosted by WooCommerce. Setting up your new merchant account with ECS Payments is done the exact same way as before using plugins.
So even if you have been kicked off the WooCommerce platform and lost your aggregate merchant account with them, you can get back up and running quickly as long as you secure your own high-risk merchant account.
Get Your Own High-Risk Merchant Account Today
If you’re experiencing problems with your WooCommerce merchant account or need to sell high-risk products, it’s time to secure your own merchant account with ECS Payments.
We are experts in the high-risk processing industry and our relationships in the processing space make it possible for us to approve merchant accounts when other services may have turned you down.
We also offer industry-leading customer support and in-house technical experts to work with you every step of the way so that your business can thrive on any platform you choose.
Contact ECS Payments to learn about our high-risk services and let our team set up your business for success.