Is your health or sports club struggling to get a fair deal on a merchant account – or even to be accepted? NMA can help. Read on for our expert view on the challenges you’re facing – and then get in touch for more information on how we can reduce your risks and costs, and get your business thriving with digital payments!
Industry Outlook
The health and sports club industry is booming. In 2019, Americans made more than 6 billion visits to the gym and industry revenue increased by 8.4% to $35 billion. Despite the recent challenges faced by COVID-19, health and sports club membership has a healthy long-term outlook. Personal fitness and health have never been more relevant or important to consumers, and the industry is expected to grow by 7.8% between 2020 and 2025.
Despite this, banks and merchant services view health and sports clubs as high risk, underlining the need for businesses to find a knowledgeable and trustworthy partner in the payments industry.
Why Are Health and Sports Clubs Considered High-Risk By Banks and Credit Card Processors?
As these are often subscription-based businesses, health and fitness clubs are highly profitable – but this model is also why they are viewed as high risk. Many paying members won’t stick with the gym, and without a physical product, it’s easy for customers to file a chargeback by claiming that they didn’t know they were still being charged the fee.
This risk leads many health and sports clubs to struggle to get approved for a merchant account or to only get approved for accounts with extremely high fees or low processing maximums (“caps”).
How to Reduce Your Risk
Once a customer has made a chargeback, it is likely that your business will take a loss – just 18% of chargeback disputes filed by merchants are successful. So sports and health clubs must work proactively to reduce the chances of a chargeback happening in the first place. You can reduce chargebacks by:
- Incentivizing member participation to keep your members coming back.
- Cultivating a community they won’t want to leave – such as by hosting engaging events and classes.
- Building a great brand that customers relate to – this makes them less likely to demand a refund.
- Continually demonstrating the value you bring to members, and communicating well to ensure that value is recognized.
- Using chargeback and fraud management support such as our strategic partners at Fraud Wrangler to help defeat chargebacks before they happen.
How NMA Can Help You Manage Your Risk
Unlike a typical bank, we can help seemingly high-risk companies to manage their risk effectively through a combination of careful underwriting, relationship building, and ongoing monitoring. By taking care of the small details, we turn “high risk” accounts into “managed risk.”
Together, our payment processing solutions and global network of strategic partnerships enable your health or sports club to save money, reduce risk, and get your funds deposited safer and more quickly than with other competing solutions.
Contact NMA today to learn more about our expertise in providing high-risk merchant services for health and sports clubs. We Work For You®.