Social media is a great way for your business to stay connected to your customer base in a friendly and interactive way. The “Reels” feature on Instagram and Facebook is becoming increasingly popular and offers companies more avenues to interact with customers.

What are Reels?

Reels are short, interactive videos that you can create and post on your company Instagram or Facebook profile for customers to watch. They’re typically around 30 seconds long, and can be made in either real-time or re-edited from actual pre-recorded footage. They typically capture exciting moments or highlights of the business, and can be anything from showcasing a behind-the-scenes tour of the business, to offering a sneak peek into an upcoming product launch.

The Benefits of Creating and Posting Reels

Increased Visibility

Reels are a great way to get your company’s name and message out there.  They more likely to reach a wider audience, as reels are more widely seen and shared.  Your posts are generally seen only by your followers, however, reels can be seen by those who do not yet follow you.

Strengthen Brand Image

Reels can be used to showcase your values, ethos, and unique selling point in a fun and engaging way. This helps to strengthen your brand image and boost recognition. The visuals used in Reels combined with creative copy and effects create a more powerful impression of your business than a static post or photo, making them more likely to be shared by your customers.

Engage with Customers

Reels are a great way to engage with customers as they provide an informal and humorous way of telling a story. People can watch and learn about your business in a way that doesn’t feel too corporate and can even be interactive.

Generate More Leads

Reels offer your business the opportunity to create engaging and entertaining content.  Because they can be seen by followers and non-followers, the increased visibility can lead to more leads and potential customers.

Reels can be used as a powerful tool to engage and connect with your customers in an fun way. It’s a great way to promote your brand and further boost brand recognition. So if you’re looking for an effective way to gain leads and engage with your customer base, creating and posting Reels is a great option.

Our dedicated team cares about our clients as individuals and businesses.  It’s challenging to operate and grow a business, so we provide resources and support for our merchant clients.  With enough other concerns, you shouldn’t have to worry about your payment processing. (Especially if you’re in a high-risk industry.)  Having your account frozen can have detrimental effects for your business going forward.  At VMS we give our customers a level of comfort, clarity, and peace of mind unrivaled in payment processing without downtime or disruptions. Our experts have certifications in industry-specific verticals such as CBD and Hemp, as well as risk and compliance, and in the overall payment space—and we’re constantly sharpening our skills. If you have more questions, contact us—we’re here to help!

Switching Merchant Service Providers (MSPs) is an important decision for online merchants.  With the wide range of options available in the market, it can be confusing. To help you make the best decision for your business, here are the top 10 factors to consider when switching MSPs:

 1. Cost: When it comes to merchant services, cost is often the deciding factor. When comparing the cost of different merchant service providers, consider factors such as the transaction rates, fees, and other associated costs. Some companies will pad the interchange or card brand fees with additional fees, so be sure to compare apples to apples. And don’t forget to ask if there is a long-term contract or cancellation fees.

2. Payment Security: Payment security is essential for online merchants. Make sure the MSPs you are considering are compliant with the Payment Card Industry Data Security Standard (PCI DSS). If your business is in a high-risk industry, make sure their banks support your business.

3. Payment Methods: Different MSPs offer different payment methods. Consider which payment methods you need for your business and make sure the MSPs you are considering offer those payment methods.

4. Customer Service: Good customer service is essential for online merchants. Make sure the companies you consider have good customer service and are available for support when needed. Will you have a person to talk to if you have any questions or concerns? Ask.

5. Integration: Integration with other systems is important for an efficient workflow. Check that the MSPs you are considering can integrate with the other systems you are using.

6. Scalability: As your business grows, you will need an MSP that can handle the extra traffic and workload. Check that the MSPs you are considering can scale with your business.

7. Reliability: A reliable Merchant Services Provider is essential for online merchants. Make sure the ones you are considering have a good track record of reliability.

8. Ease of Use: Ease of use is a key factor to consider. It is important to evaluate the provider’s user interface and merchant portal to ensure that it is intuitive and easy to navigate.

9. Reputation: Check the reputation of the MSPs you are considering. Read online reviews and talk to other merchants who have used them. You don’t want to find yourself in a situation where your account is frozen and you don’t know why.

10. Flexibility: Make sure the MSP you choose is flexible and able to adapt to the changing needs of your business.

Conclusion

Your choice of payment processors, in terms of both merchant services and customer support, is an incredibly important decision for the well-being of your business. Over the past 10 years, Valmar Merchant Services has been a trusted payment processing partner, providing our customers a level of comfort, clarity, and peace of mind unrivaled in payment processing. Because of the banks we partner with we can serve customers in almost any industry–even the “high-risk” ones our competitors won’t touch–with no downtime or disruptions. Want to learn if we’re right for you? Reach out to us for a discovery call.

The collapse of Silicon Valley Bank (SVB) has brought to light some of the risks associated with any business’s reliance on a single financial institution. This incident has also raised concerns about the level of risk that some banks take and the potential impact on the broader economy. While the SVB collapse was shocking, it wasn’t inevitable. In this post, we’ll examine the reasons behind SVB’s collapse and the lessons that can be learned from this experience.

The Tech/Startup Industry’s Reliance on Silicon Valley Bank

One of the key issues that led to SVB’s collapse was the tech/startup industry’s heavy reliance on this one bank. SVB had established itself as the go-to bank for many high-growth tech companies, providing loans, lines of credit, and other financial services that helped these companies scale. However, this also meant that the bank was heavily exposed to the risks associated with the tech/startup industry.

As the tech/startup industry grew, so did the level of risk that SVB held. Even large, established tech companies that should have had the resources to conduct thorough due diligence did not have a backup bank. This meant that when SVB collapsed, these companies were left scrambling to find alternative banking services, illustrating that bigger businesses don’t always have the best business practices.

The Controversial “Bailout”

SVB’s collapse was a major blow to the tech/startup industry, which makes up a significant portion of the United States’ GDP. In response, the government stepped in to provide a bailout, which helped to shore up the sector and prevent further damage to the economy.

However, the bailout was controversial. Many people were unhappy that their tax dollars were being used to prop up a bank that they believed should have been better managed. Moreover, some businesses with deposits over $250,000 were still being made whole, despite exceeding the FDIC threshold, setting a concerning precedent.

Silicon Valley Bank’s Risk Management Failures

One of the key factors that led to SVB’s collapse was the bank’s failure to adequately manage its risks. SVB served the high-risk startup industry, where companies may have a harder time raising capital in an economic downturn. SVB should have followed the example of larger banks that were putting safeguards in place knowing that interest rate hikes were likely climbing.

SVB assumed that the rate of cash usage would be in line with historical levels. However, as inflation got worse, the bank’s cash utilization rate shot up, and the bank was caught off guard. It had to cash in long-term treasuries at a loss, which was irresponsible and put the bank at greater risk. That information was only disclosed as a footnote in the bank’s financial reports.

The Impact on Fintech Businesses and Lenders

When SVB collapsed, Valmar Merchant Services received an influx of requests for information. Current customers wanted to make sure they had adequate bank redundancy in place, those with money tied up in SVB needed help transferring their funds, and new customers who had trouble establishing banking relationships because of the high-risk nature of their businesses inquired about creating redundancy.

This experience highlights the importance of bank redundancy for all businesses. Having a backup bank can help to mitigate the risks associated with relying on a single financial institution. While it can be hard for high-risk banks to find one bank willing to do business with you – let alone two – it’s not enough to be comfortable processing all of your transactions with the first financial institution that will take you on. You must have a second banking option.

Key Takeaways

The collapse of Silicon Valley Bank provides several valuable lessons for businesses and the broader financial industry.

First, businesses should not put blind faith in the banking system. Relying on a single bank for all financial transactions is a significant risk that must be avoided. Never allow your business to operate with a single point of failure!

Second, businesses should take a more proactive approach to the due diligence process when considering a relationship with a banking partner.

Finally, if you operate a high-risk business, it’s very important that you work with a payment processor who is not only friendly to your sector but also well-versed in the unique hurdles you face.

Listen here: The Importance of Bank Redundancy: Lessons from the Silicon Valley Bank Collapse

As the CBD/Hemp industry continues to grow at unprecedented rates, touching virtually every industry – from cosmetics to pharmaceuticals, to food and drink, and beyond – there is an incredible opportunity for operators to dramatically increase their revenue. 

Market research experts project that the collective market for CBD sales in the U.S. will surpass $20 billion by 2024. Unsurprisingly, this is a projected increase from the recent forecast made by New York-based investment bank Cowen & Co, which estimated that the market could pull in $15 billion by 2025.

With so much opportunity, we were thrilled to have the chance to meet with both established and startup companies in the CBD/Hemp space at MJBizCon to learn more about how they’re taking advantage of this market, and what challenges they are facing along the way – so we can then get to work solving them.

Through live surveys and hundreds of conversations, we’ve noticed four key ideas that are front-of-mind in the CBD/Hemp industry right now:

Honesty and Transparency

Owners and operators in the CBD/Hemp space are frustrated with their experience trying to find a payment processor who is honest and transparent about their rates and policies. It was evident that many merchant services providers claim to be supportive of the challenging regulatory needs of CBD/Hemp businesses, but then become totally unresponsive once the contract has been signed or go silent when a regulatory issue is detected. CBD/Hemp payment processing requires an active, hands-on relationship that only begins at onboarding, and grows more robust over time, including instances where concerns arise regarding compliance needs. And that leads us to…

Compliance and Regulatory Support

Many merchants are interested in staying ahead of the rapidly-changing compliance and regulatory curve in CBD/Hemp sales. It is not enough to work with a merchant services provider who will tolerate CBD/Hemp; in today’s landscape, they must take an active role and genuine interest in predicting and managing compliance hurdles. It is tough to find a payment processor that works collaboratively with its merchants to prevent their CBD/Hemp merchant account from getting shut down.

Dealing With Bank Sentiment Toward CBD

While the CBD/Hemp space might be the next great frontier, as far as risk-averse banks are concerned, anything related to cannabis is still the Wild West. So, as CBD/Hemp operators working to rapidly scale your business, you might find yourself regularly set back by banks who are skittish about the industry and remove your processing ability without warning. Finding a reliable banking relationship with an institution that will not jump every time they encounter regulatory conflict is critical to your business’s growth. 

Brick-and-Mortar is Still King

You might be surprised to learn that in the CBD/Hemp space, in-person retail sales are rapidly outpacing online growth by a significant margin. As a result, smaller CBD companies increased their share of overall sales to 71% in the second quarter of 2022, up from 67% in the first. This makes sense when you consider that customers appear to be returning to in-person shopping with enthusiasm following the pandemic and that eCommerce demands additional regulations from operators on top of what is required for brick-and-mortar stores. Don’t underestimate the power of effective in-person customer service to earn new customers in this emerging market, especially for those trying cannabinoid products for the first time – or it will cost you!

So, What’s Next?

At Valmar Merchant Services, we will continue to make significant investments in our team’s ongoing education in order to offer the very best customer service and experience. Our experts have certifications in industry-specific verticals such as CBD and hemp, as well as risk and compliance, and in the overall payment space – and we’re constantly sharpening our skills. We’re working hard to keep the pulse of the CBD/Hemp industry – from compliance to marketplace trends – and our customers will continue to reap the benefits. 

Ready to learn more about how Valmar Merchant Services can support your CBD/Hemp business’s rapid growth?

Let’s Talk.

The CBD sector is one of the fastest-growing and most demanding industries worldwide. Projections indicate that the CBD market will clock $20 billion in sales by 2024. The surface has only been scratched on the earning potential of CBD, but the hemp business presents notable and unique challenges. Understanding these factors will help drive your CBD business toward tremendous growth and reduce costly downtime.

Considering Compliance Implications on Insurance Coverage

CBD producers and distributors carry a lot of the same insurance risks as any other business, including property damage, customer lawsuits, and liability concerns. But they also face a whole host of industry-specific risks that create compliance challenges that can jeopardize a CBD business’s ability to protect itself.

In order to maintain insurance coverage, CBD businesses must remain in compliance with all state and federal regulations throughout manufacturing, distribution, and sale—despite the fact that the rules are often contradictory and always changing. Every step of the process brings insurance concerns unique to CBD, from cultivation to harvest, documentation and testing, derivation and production, licensing, labeling, sales, and more. Insurance issues may also result in a loss of capital, as many investors will require proof that a CBD business is adequately insured and has consistently met compliance requirements to avoid jeopardizing their investments.

To successfully navigate these considerations and lessen potential exposure, it’s essential that CBD businesses retain insurance professionals with proven expertise in serving this industry.

Marketing and Labeling Within Regulations

Another area of compliance that is particularly fraught with complexity for CBD-related enterprises is how products are packaged and advertised. When it comes to labeling, each state carries its own requirements governing supplements including ingredient listings and specific words that cannot be included. Complex inclusions and exclusions can lead to product packaging that’s legal in one state but banned from shelves in another.

Accurately communicating product benefits is another area where CBD can attract warning letters and enforcement actions. The FDA explicitly prohibits language that positions CBD as a safe and effective treatment or cure for diseases or conditions that have not been studied or proven in clinical trials. Even loose claims that CBD can provide general health benefits can raise red flags for regulatory bodies.

Web and social media content is another area where business owners—or the people they hire to write content and manage social accounts—can find themselves in trouble and out of compliance accidentally. Using problematic hashtags, liking or sharing content that includes disease keywords, or alluding to health benefits can attract warning letters and run the risk of being banned from social media altogether.

While educating marketing managers and packaging designers is a good first step to achieving communication compliance, hemp companies are better off hiring professionals with a deep portfolio representing the supplement industry whenever possible.

Ensuring Adequate Redundancy with Stable Bank Contracts

Hemp banking presents numerous challenges that may be detrimental to your CBD business and make partnering with banks while in the CBD business difficult. For example, laws differ in every state. This means that the differences between federal and state laws can also be a risk to your business and to the financial institution.

Banking institutions require high-risk assessments to ensure you’re dealing with legalized products. Once legality is determined, there’s still considerable stigma and risk-aversion to hemp-related businesses. Stability of services is critically important.

Staying in Compliance with Industry-Specific Support

Numerous laws have been implemented to govern the sale and consumption of CBD products, as well as the payment processing requirements surrounding those transactions. CBD regulations are quickly evolving, and business operators must keep in touch with these changes.

When you’re operating in a high-risk space like CBD and hemp, it’s important to ensure that your operational partners are familiar with the specific compliance needs (and subsequent hurdles) for your sector including relevant certifications and regulatory training. Otherwise, you could end up facing serious penalties or struggling to manage compliance requirements as laws continue to change.

Mitigating Fraud and Chargebacks Plus Utilizing Real-Time Reporting

Mitigating fraudulent chargebacks involves a set of industry best practices that help safeguard all the stakeholders in the system. This is due to increased defrauders initiating malicious transactions or stealing information.

CBD businesses are considered particularly high risk because of special compliance needs, and online and international transactions only add to that. There is also an ever-evolving set of fraud schemes affecting the CBD industry specifically, and it’s important for sellers to be aware of what they are and how they work. While many are intentional, others are less malicious and often tied to the growing popularity of CBD among teenagers. Take friendly fraud, in which a minor uses a parent’s credit card to purchase CBD products without permission. If the parent notices the unauthorized charge, disputes often result in chargebacks to the merchant. Underaged buyers are often at the root of reseller fraud as well, which involves using stolen credit cards to purchase CBD products and capitalizing on the products’ high resale value by selling them to peers.

Reduce Risks with the Right Partners

Valmar Merchant Services acts as the backbone of carefully curated teams, in partnership with CBD-specific insurance and marketing advisors, all working together to keep your business in compliance and thriving. We give our customers a level of comfort, clarity, and peace of mind unrivaled in payment processing—even the “high-risk” ones our competitors won’t touch—with no downtime or disruptions. Our experts have certifications in industry-specific verticals such as CBD and hemp, as well as risk and compliance, and in the overall payment space—and we’re constantly sharpening our skills. If you have more questions, contact us—we’re here to help!

Take advantage of our FREE Website Compliance Review!

Our dedicated team cares about you and your business!  In the ever-changing landscape of online business, compliance is non-negotiable. Ensuring your website aligns with industry regulations isn’t just about meeting requirements; it’s about securing your business’s future.

That’s why we’re offering a Free Website Compliance Review, your key to a compliant online presence. Our expert team, led by certified professionals, will assess your website, highlighting potential compliance issues and offering actionable strategies to resolve them. This Free review is offered with no obligations.  Take the proactive step toward compliance today, and let your business thrive with confidence.

Many companies are leaving payments susceptible to fraud. Online payments are a growing trend worldwide. This growth is due to the increasing emergence of fintech for seamless and instant payments, online lending, and demands for convenient payment solutions. Despite this shift supporting changing market and economic needs, it forms a conducive environment for fraud.

Most payments are instant with minimal human intervention, making it a high-risk factor for businesses. In 2021, eCommerce losses to payment fraud hit $20 Billion worldwide, a 14% increase from previous years. That year, the US lost up to $756 million to bank transfer fraud. Read to learn more about how your business might be susceptible.

Why is Fraud Detrimental to Your Business?

Besides the obvious financial costs, loss of public trust in your business is a major challenge for victims of large-scale fraud. Lost revenue from reputational damage can be lasting and hard to measure. Additionally, fraud can cause serious chargeback compliance issues for your business, potentially even resulting in the loss of the ability to process payments at all.

How You’re Leaving Your Payments Susceptible to Fraud

Beware of these errors.

1. Operating in High-Risk Spaces

The nature of your business dictates your transaction types, determining your level of risk. For instance, banks and other processors view businesses like e-commerce, CBD, debt collection, and online lending as high-risk. Engaging unreputable third-party partners could leave you open to serious vulnerabilities like bot-net malware and malicious private data sharing, which enable whole-system penetration.

2. Expired Customer Data and Insufficiently Funded Accounts

KYC (know your customer) data often expires; this seemingly insignificant factor threatens your business. Expired KYC information like residential addresses and ID numbers can lead to transaction delays. The same goes for dormant accounts and an insufficiently funded card or bank account.

Fraudsters capitalize on these loopholes by calling your clients to update their KYC or risk canceled payments or loan disbursements. Unsuspecting customers, frustrated at the thought of the imminent inconvenience, share their data, giving unauthorized account access. You’ll lose the customer, incur chargeback costs, or potentially disburse a loan to the wrong recipient.

To mitigate the risk of chargebacks due to this type of fraud, frequently update your customer data, and educate your internal teams on risk management.

3. Friendly Fraud

In a typical “friendly fraud” scenario, a customer uses their card – or knowingly allows someone else to use their card – to make a purchase. They then falsely claim that they never authorized the charge, or that they never received the funds issued, and initiate a chargeback to wrongfully get their money back. Even if the retailer has sufficient evidence and support to prove the consumer made the purchase, there is no guarantee that the merchant will be able to successfully fight the chargeback. Friendly fraud can be very costly to merchants as they lose money and merchandise, pay the cost of the chargeback, and face the threat of their processing account being shut down if this fraud occurs too frequently.

4. Identity Fraud

One can pay using a stolen card or online banking credentials. When this happens, the legitimate owner will demand refunds. Such cases are difficult to solve and result in significant losses, especially because card payment is the most frequent method hit by fraud. In 2020, the US reported 459,297 credit card fraud cases; of this, 85% were identity theft, a 44.6% increase from 2019. This worrying trend is why you should explore ways to protect the payer and yourself.

5. Unclear Dispute Resolution Guidelines and Processes

While losses due to fraud may be recoverable, the process can be painful and long. Such experiences emanate from variable dispute resolution processes and procedures. Often, you might not agree with the bank or card provider, causing lost payments, and a backlog of chargebacks.

Protect Your Business With the Right Partner

With the highlighted susceptibility trends, your best bet is to source the most secure payment platforms. A reputable merchant services provider will guarantee solutions to common and industry-specific processing problems that cost you money, customers, and peace of mind.

Valmar Merchant Services has you covered for such needs. With our unique network of direct banking relationships, we have unrivaled expertise in handling customers in almost any industry, including “high-risk” ones that other providers may not want to serve.

As partners, we’ll deliver highly knowledgeable service and robust payment processing systems with effective fraud detection and no downtime.
Please get in touch to learn more about how you can protect your business for optimum reputation and customer satisfaction and protect your bottom line from fraud.

Let’s Talk.