Posted by admin on Sep 20, 2013


direct payment processor, Independent Sales Organizations, recurring billing cycle

Direct Processor Merchant Accounts

Here are three cost saving features that are available only directly through a direct payment processor.

There are only a handful of direct processors.  Most merchant account providers are Independent Sales Organizations (ISOs) rather than direct payment processors.

Account Updater  Stabilizes Cash Flow

Account updater transforms up to 75% of declined card transactions into authorized payments without manual intervention.  This reduces expenses for companies with recurring billing, recurring payments, and subscription billing models.

During every recurring billing cycle, a significant percentage of transactions are declined.  The most common reasons for card declines are:

Cards reissued due to security breaches.  Javelin Research reports 28% of all consumers received a replacement debit or credit card last year.

  • Cards being upgraded.
  • Expired expiration dates

Account updater eliminates the time and expense of dealing with declined card transactions.  When a card is declined, the processor automatically retrieves the updated card information from the issuing bank.  The card that was initially declined is re-submitted with the updated information.  Up to 75% of the declined transactions are transformed to approved payments.  Revenues are rescued and recurring payment income is protected, all without the need for manual intervention.

Without account updater, merchants have the burden of contacting customers to request updated card information.  Increasing the cost of customer service as well as  increasing the risk that the customer will cancel the service when updated card information is requested.

Eliminate Gateway to Save Money   

Direct connection to the front/back end processor eliminates the need for a payment gateway.  A payment gateway creates a possible “point of failure” and adds an unnecessary layer of expense.   Direct connection to the processor removes potentials for downtime, timeouts, eliminates gateway fees/costs and reduces payment processing expenses.

Dynamic Descriptor Reduces Chargebacks

Dynamic descriptors give companies the option to use the name of the product or service as the descriptor on the customer’s credit card statement.  The descriptor can also display a different customer service phone numbers for products or services.  This significantly reduces customer disputes and chargebacks.

Many companies offer a variety of products or services.   If a company name appears as the descriptor on customers’ card statement rather than the name of the product or service, the customer may not recognize the charge.   As a result, customer disputes/chargebacks occur because customers may not identify the company name with the specific product or service which was purchased.

This happens even if a company clearly advises the customer at the time of purchase of the name which will appear on the customer’s credit card statement.   Another common reason this happens is when the spouse who did not make the purchase handles the family finances.  The spouse may not recognize the name of company but would recognize the name of a product or service that was purchased.


Direct processor accounts are an excellent option for high volume merchants.  To qualify for a direct account with a processor, a minimum of $500K per month is required.

If you are a high volume merchant, it is smart to explore your direct payment processor options for merchant accounts.  You'll discover added features and benefits that will help your business grow.

Interested in finding out more about direct processor high volume merchant accounts?

Contact today.