Getting a Continuity Merchant Account for Recurring Billing

Getting a Continuity Merchant Account for Recurring Billing

Getting a Continuity Merchant Account for Recurring Billing


Continuity-Subscription Services have gained a lot of popularity in recent years, leading to an increasing need for businesses to obtain continuity merchant accounts. A continuity merchant account allows businesses to handle membership services, subscriptions, auto-ship products, and recurring paymentsto efficiently process credit cards. Read on to explore the importance of these merchant accounts and gain insights into the process of acquiring one.

What is a Continuity Merchant Account?

A continuity merchant account is a type of merchant account that has been designed for businesses that offer recurring/subscripted-based services. It is a necessary tool for companies engaged in recurring billing models and allows businesses to efficiently accept recurring payments from customers. With a continuity merchant account, you can securely process automated payments, manage customer subscriptions, and maintain a steady revenue stream.

What Business Models Require Continuity Merchant Accounts?

Continuity merchant accounts are crucial for various business models that rely on subscriptions and recurring payments. These business models include the following:

  • Subscription-based Services:From streaming platforms like Spotify and Netflix to software providers like Adobe Creative Cloud, these subscription-based services provide convenient access to a variety of content and tools for a recurring fee.
  • Membership-driven Enterprises: These include professional associations, online communities, gyms and fitness clubs, etc. Membership-driven enterprises provide exclusive services and benefits to their members and ensure a continuous flow of revenue with recurring subscriptions.
  • Product Replenishment Services:These include monthly product boxes, eCommerce subscriptions, etc. These business models deliver curated products directly to consumers’ doorsteps on a recurring basis, saving them effort and time in restocking essential items.
  • Online Education and Training: Online courses and tutoring services offered on subscription bases empower learners to obtain new skills, pursue professional development, or receive personalized instruction from the comfort of their homes.

What is the Approval Process?

The approval process for continuity merchant accounts varies from one merchant services provider to another. The general steps involved include the following:

  1. Application Submission:The first step is filling out the application form provided by the merchant services provider. It typically requires information about your business. Applying also involves document submission. Supporting documents that may be required include bank statements, financial records, business license or registration documents, articles of incorporation or partnership agreement, previous processing statements (if applicable), etc.
  2. Underwriting and Risk Assessment:Once you submit your application and supporting documents, the provider will review them and evaluate the risk associated with your business.
  3. Due Diligence and Compliance Checks:The merchant services provider may conduct due diligence and compliance checks to make sure your business meets regulatory requirements.
  4. Underwriter’s Decision:Based on the evaluation and risk assessment, the underwriting team of the provider will make a decision regarding your application. If approved, you will proceed to the next steps, which typically include account setup, testing and activation, etc.

What Rates and Fees Should You Expect to Pay?

Continuity merchant accounts usually come with specific fees and rates tailoredto the unique needs of subscription-based businesses. Common fees include the following:

  • Application fee
  • Setup fee
  • Monthly service fee
  • Transaction fees
  • Chargeback fees
  • Additional service fees (anti-fraud, chargeback mitigation, etc.)

The rates associated with these fees can vary depending on various factors such as your business’s industry, risk assessment, processing volume, etc. Transaction fees typically range from 1% to 3% of the transaction amount while flat fees per transaction can range from a few cents to a couple of dollars.

Why Are Continuity Merchant Accounts Considered High Risk?

Continuity merchant accounts are often considered high risk due to the following reasons:

  • Chargeback Potential: The recurring paymentssystem in continuity models increases the possibility of chargebacks and increased chargeback ratios, posing a higher risk to merchant services providers.
  • Subscription Cancellations: Customers may cancel their subscriptions abruptly, resulting in potential revenue loss for businesses. This unpredictability contributes to the high-risk classification.
  • Regulatory Challenges: Certain industries associated with recurring models, e.g. online dating, nutraceuticals, etc., face stricter regulations. Compliance with these regulations can be time-consuming and complex and adds to the risk profile.
  • Subscription Lifespan: Unlike one-time purchases, subscriptions may have a longer lifespan (months or even years). The extended timeframe exposes merchant services providers to potential changes in market conditions, industry dynamics, or customer preferences, hence increasing risk.
  • Potential for Payment Delinquencies: Continuity models rely on recurring payments and there is a risk of customers failing to make timely payments or defaulting on their subscriptions. This non-payment risk makescontinuity merchant accounts more susceptible to financial instability.

Getting a Continuity Merchant Account Set-Up Quickly

Getting a continuity merchant account setup is a straightforward process. Start by researching and choosing a reputed merchant services provider that specializes in handling continuity accounts. This will help ensure that the account approval process is hassle-free. It is also recommended that you gather all necessary documentation and financial records to provide a comprehensive application. Last but not least, be proactive and transparent in addressing any potential inquiries or concerns from the merchant account provider as it will also speed up the merchant account approval and set-up process.

Overall, obtaining a continuity merchant account is crucial for businesses operating in the recurring billing and subscription-based sectors. When acquiring a continuity merchant account,it is recommended that youdo your homework andcarefully evaluate different providers. High Risk Merchant Account (HRMA-LLC) is a trusted name in the industry that specializes in offering reliable high risk merchant accounts.Visit the provider’s website to learn more about how it can help you obtain continuity merchant account services tailored to your business needs.


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