Penny auctions (also known as bidding fee auctions) are a type of all-pay auction, meaning all participants are required to pay a non-refundable fee to place each, small incremental bid. In order for these penny auctions to take place, these businesses must have electronic payment processing. The ability to accept and process credit and debit cards requires a merchant account – something that is not easy for a penny auction business to secure.
Penny auctions are considered to be high risk. In fact, their reputation are so tarnished by scam websites and businesses that take advantage of consumers that they are considered just as risky as gambling. Because of scammers running illegal operations, it is next to impossible for businesses in this industry to find providers willing to work with them. Banks and other traditional sources simply won’t go near the penny auction industry.
High Risk Merchant Accounts
Thankfully, high risk providers like First American Merchant are more than willing to help the entrepreneur with their penny auction business. As a high-risk specialist, these companies understand the obstacles high risk businesses face, and tailor their services to meet their needs. Regardless of the high-risk categorization, these alternative providers offer high volume merchant accounts for the penny auction business.
A penny auction merchant account allows the business to easily process debit and credit card transactions. These merchant accounts also allow the business owner access to other merchant services, like chargeback prevention and protection programs. Depending on the provider you choose, you should also have access to multiple payment gateways. As industry experts, high risk providers like FAM also offer a strong support team for your questions and concerns.
The biggest advantage of working with a high-risk provider is the simplicity of the application process. Unlike working with a bank, an alternative provider’s application process does not involve endless documentation, strict credit requirements or extensive business history. Instead, a provider like FAM requests basic, minimal information and bases approval off your business’ performance. The application itself takes a few minutes to complete, and the merchant account can be setup in as little as 24 hours – if not sooner.
If you’d like to secure payment processing for your penny auction business or startup, consider a high-risk provider like FAM. Penny auction is a complicated industry, but your business’ payment processing doesn’t have to be.Get Started Now