The continuity industry is classified as high risk because products sold are billed through a recurring business model. This type of business is generally classified as high risk, making finding a reliable payment processor difficult. At Allied Payments, we have focused on providing businesses with specialized continuity merchant account services.
Businesses categorized in the continuity industry include membership and subscription-based products and services. Most products billed through a continuity program are sold online or through a mail-order/telephone-order company. The frequency for chargebacks and returns is problematic for these merchants and is vastly responsible for their grouping into the high-risk merchant category.
While most payment processors will accept any merchants to being with, most will decline to continue working with recurring billing clients. This often leaves merchants with paying customers and no way to bill their credit or debit cards. These payment processors often will not allow merchants to access their customers’ billing information, forcing them to sign up customers again.
Finding a suitable payment processor can be difficult for many members or subscription-based businesses. The field of payment processors and financial networks willing to allow these transactions is minimal. This makes finding and retaining their relationship essential for merchants looking to start a successful business.
What are Continuity Merchants?
Businesses falling into the continuity category are given consent to billing a customer at regular intervals. Charges can be either for products or services provided on an ongoing or monthly basis. Customers are charged without notice, leaving customers responsible for continuing to pay until they cancel their accounts.
Many of the continuity programs are based on customers opting into a program. Most of these programs begin with a low to no-cost introductory period to try the product or services. Services will continue to be provided and products shipped until the customer contacts the merchant to end their subscription.
After the introductory period, customers that do not return or otherwise cancel their subscription will normally begin being charged the full price. While customers are informed of these billing changes during the initial sign-up, most merchants do not remind the consumers again. This can shock some consumers and result in the continuity industry’s high refund and chargeback rates.
Types of Card Processing for Continuity Merchant Accounts
Some of the typical types of businesses in the continuity industry using a recurring billing merchant account service include:
- Media Services Merchant Accounts:
Access to online entertainment, whether television, music or print media. - Telecom Services Merchant Accounts:
Offering customers contracts or month-to-month service plans is common from telecom and broadband providers. - Software Services Merchant Accounts:
Various software providers, whether marketing, support or other office products often use monthly rebills. - Membership Club Merchant Accounts:
Retailers offering discounts to consumers might charge a yearly fee to access their discounts. - Extended Warranty Merchant Accounts:
Manufacturers or repair companies can provide customers with ongoing support through warranty plans. - Nutraceutical Merchant Accounts:
Nutraceuticals provide consumers with continuous monthly product shipments, from weight-loss supplements to energy boosters. - Subscription Boxes Merchant Accounts:
Monthly gift box services have become increasingly popular by billing customers indefinitely. - Non-Profit Merchant Accounts:
Many non-profits today charge donors nominal monthly fees until the donations are canceled.
Startups in any of these industries will face obstacles during their application process. Most financial institutions do not allow or want to have unproven merchants processing transactions through their networks. Businesses with a proven track record can experience problems with their payment processing services. Financial institutions looking to reduce risk have terminated merchant accounts for even the most established continuity businesses.
Finding a specialized payment processor for recurring billing business models is essential for a merchant’s stability and longevity. At Allied Payments, our partner banks have built their business models around continuity and other high risk industries. Contact one of our payment processing professionals to apply for a merchant account and start processing payments as soon as tomorrow.
Chargeback Reduction for Continuity Billing Merchant Accounts
Experiencing high chargebacks and returns will be a part of most continuity businesses. Protecting themselves with a strong Terms and Conditions statement is one way to help reduce chargebacks. Some of the points used by existing businesses can include:
- Description of the Products and/or Services being purchased
- Explanation of billing; including frequency and cost
- How to cancel membership; including merchant contact information
- Clear return and refund policy for products and/or services purchased
- Cost for products or services not canceled in allotted timeframe
- Accepting Products and/or Services constitutes acknowledgment of billing agreement
- Products and/or Services will continue to be provided until the cancellation
- Frequency of Products and/or Services being delivered or rendered
- Time for customers to review products or services before payment is made
Besides having a complete Terms and Conditions webpage, merchants can also take steps in addition to on-page information including:
- Concise credit card descriptor with customer service phone number
- Refund customers immediately when contacted
- Implement a chargeback mitigation service to catch potential chargebacks
Tips for Finding a Negative Option Merchant Account Processor
Finding a reliable and reputable subscription payment services provider to partner with is important for building a business. Merchants that have built up a customer base of paying customers do not want to risk losing their merchant account due to their business type. Account termination will result in a loss of a substantial amount of time and money invested in building up the user base. This makes it all the more important for continuity merchants to research financial institutions before deciding.
Below are some ideas for performing thorough research of prospective payment processors:
- Research the payment processor for any complaints or other concerns
- Make sure the processor has a higher threshold for chargebacks
- Ask for references from continuity merchants processing payments through them
As one of the leading high risk payment processors in the USA, Allied Payments is experienced with difficult-to-place merchant industries. A specialty of Allied includes the ability to accept continuity and recurring billing merchants in our high risk portfolio.
Accept Payments for Continuity Services Today!
Businesses establishing a recurring billing merchant account with Allied Payments can charge customers using regularly scheduled intervals without concern. Our staff of continuity professionals will help businesses set up their billing programs through our high risk banking network. Ensuring merchants have reliable and consistent payment services is our top priority in the subscription merchant services industry.
Like merchant accounts, the Allied Payment Gateway provides subscription and membership businesses with a reliable and secure way to accept higher risk payments. Our gateway is fully PCI Compliance and offers an integrated virtual terminal to businesses at no extra cost. This allows merchants the ability to expand their business by accepting mail orders and telephone orders without the need of any additional equipment.
Our team will work with businesses to help find the best solution to fit your company’s needs without making any sacrifices. Our network of high risk financial institutions can provide the credit card processing services required by continuity businesses. Our fast application process allows businesses to accept payments in as little as 24 hours.
For more information about our continuity and negative option billing payment processing services, contact the payment professionals at Allied Payments. We look forward to creating a long term relationship with all our partners in the continuity and recurring billing industries.
Frequently Asked Questions (FAQ)
What is a continuity merchant account?
A continuity merchant account is a specialized payment processing solution designed for businesses that operate on a recurring billing or subscription model. These accounts allow companies to accept payments from customers on a regular basis—monthly, quarterly, or annually—making them ideal for memberships, subscription boxes, digital services, and more.
Why are continuity businesses considered high-risk?
Continuity businesses are considered high-risk due to higher chargeback rates, customer disputes over recurring billing, and regulatory scrutiny. Since these businesses often bill customers automatically, payment processors and banks view them as more likely to face cancellations, refunds, and fraud claims.
How can I get approved for a continuity merchant account?
To get approved, you need to partner with a provider like Allied Payments that specializes in high-risk industries. You’ll typically need to provide business details, processing history, a website with clear billing terms, and demonstrate compliance with industry regulations. Having a clean chargeback history helps improve approval chances.
What types of businesses need continuity payment processing?
Continuity merchant accounts are essential for:
- Subscription box services
- Health and wellness programs
- Digital streaming or content memberships
- Software-as-a-Service (SaaS)
- Supplements and nutraceuticals with auto-ship models
- Online coaching or e-learning platforms
What features should I look for in a continuity merchant account provider?
Look for providers that offer:
- High approval rates for high-risk models
- Chargeback mitigation tools
- Recurring billing and subscription management
- Fraud prevention solutions
- Reliable customer support and fast funding
Can I reduce chargebacks with a continuity merchant account?
Yes, a good continuity merchant account provider will offer tools to manage and reduce chargebacks. This includes clear billing descriptors, automated email reminders, transparent refund policies, and real-time alerts. Allied Payments also helps businesses integrate chargeback management platforms to protect revenue.
Is there a difference between regular and continuity merchant accounts?
Yes. Regular merchant accounts are designed for one-time transactions, while continuity merchant accounts support recurring billing and subscription models. Continuity accounts also include additional risk management features due to the increased potential for disputes and chargebacks.
How long does it take to set up a continuity merchant account?
The setup time typically ranges from 24 to 72 hours once all documentation is submitted and underwriting is complete. Allied Payments offers a fast, streamlined approval process for businesses in the continuity space.
Can a startup get a continuity merchant account?
Yes, even startups can qualify. While established processing history helps, Allied Payments works with new businesses by assessing their business model, product transparency, and compliance with billing regulations. Having a well-developed website with clear terms can improve your approval chances.
Why choose Allied Payments for continuity merchant account services?
Allied Payments is a trusted provider specializing in high-risk industries. We offer:
- Tailored solutions for continuity and subscription-based businesses
- Fast approvals and expert support
- Tools to reduce fraud and chargebacks
- Scalable solutions that grow with your business
- Industry-leading uptime and secure payment processing
Thank you Charles
