All new Registrations are manually reviewed and approved, so a short delay after registration may occur before your account becomes active.
Braintree says "no can do" for VPS hosting businesses...
Reply from Braintree after submitting an application:
Thank you for checking out Braintree. Unfortunately, due to the type of industry that you are in we are unable to underwrite your business for a merchant account at this time. If you have any further questions please let me know. Thanks again.
I reply back with:
What do you mean? I am in the web hosting industry – you are currently supporting hundreds of other web hosts and continue to open new accounts for other hosts every day.
Are you sure that you understood the information I supplied in the application? Your denial of my application is honestly confusing and mind boggling unless there is indeed confusion as to what we do based on my application.I’ve also never heard of any other merchant account underwriter denying a business because they were a web hosting company. This is not qualified as a high risk industry…
They reply back with:
Thanks for reaching back to me. Braintree evaluates each application on a case-by-case basis. While there may be legacy users of our platform that have similar business models to yours, our banking partner mandates many of the policies in place that dictate which business types we are able to underwrite. At this time, we would have to follow their policies as they have told us that we can no longer board VPS hosting services.
Ummm, ok... but oh well.
Too many shit VPS companies blowing up their charge back ratios and killing it those of us who arent clueless.
Comments
I know how frustrating it is to put time into something for a "computer says no" answer but in fairness, hosting is definitely high risk.
Just try someone else, I mean it sucks that people even chargeback companies.
Maybe don't tell them your doing VPS per se? I got accepted for my merchant account here maybe two weeks ago.. Though to be fair, we don't deal with only VPS's.
We use Wirecard, but they took exception to us running an affiliate program. I suspect payment processors are generally sceptical of intangible products and those who have a history of higher chargeback ratios.
FWIW with wirecard, they take 1%, hold funds for 7 days. We use a 3rd party to interact with them to avoid extra PCI compliance overhead.
Then they see the patterns, the complaints about a VPS service and freeze what you have with them for dishonesty.
I think this is because the copyright mafia wants to cut off revenue stream to file locker sites... correct me if I am wrong.
I won't correct you, just say you are wrong.
XD I said this because I read something similar in a different thread, except there the payment provider used the word "file locker". Can't find anymore
Deep in the Matrix.
Very nice.
Barriers to entry... to beat the matrix you gotta read the source
I got similar years ago. They wanted me to use a separate merchant account so they had no liability and charge 99/month for the management and API.
End result was stripe.
That was standard before they go acquired.
Braintree is owned by PayPal... a hint of things to come?
That's been the case for a long time and FWIW I've found both brands to be generally very good. I still wouldn't leave a high balance in Paypal (why would anyone?) but generally, I've found them to be ok
We use Mollie.nl for payment processing and they have no issues with VPS companies. Weird your payment processor thinks VPS is an issue.
We use braintree without issue
I wouldn't be surprised if in a few years it's nearly impossible to gain credit card processing in hosting industry for any new entrant.
What if they detect it later ... I mean will it violate their ToS ?
We ended up using ccavenue ( for CC , Debit Cards and Direct Bank Debit ) after Braintree rejected our application.
Simply hope that BitCoins take over , I feel its a win win for both clients and hosts.
@ChrisG One thing to keep in mind is that most card processors hate annual payments in our industry. They only like recurring revenue that is on a monthly basis. That's probably why they disallow VPS providers, as a high percentage of VPS providers offer annual pricing.
There are a couple other options for you, the first being to use Stripe.
The next, pay the $30/mo fee and get Paypal Website Payments Pro. Integrates seamlessly with WHMCS to accept credit card transactions right on your website.
Well, thanks for posting, this is great guidance for the rest of us (i.e., avoid stating that we only sell VPS).