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Why Do Payment Gateways Reject Drop Shippers?
Payment gateways act as security buffers between the merchant and the customer. When a customer tries to purchase something from your website, that customer's financial data is stored in the payment gateway's database. The payment gateway sends this information to the customer's bank, issuing your product via an encrypted connection.

A Payment Gateway Is A Middle Man Between You, The Merchant & The Customer.

If you're a drop shipper, then the payment gateway is a middleman between you and the customer. It's like a bank or an eCommerce store, except it has no inventory or products.

The payment gateway is not your customer—it only knows of yourself as a merchant and the customer as its cardholder. The payment gateway has no idea who shipped the product to whom because they don't care about anything except what they can do with their information: securely process credit card payments online.

The Payment Gateway Provides An Interface Between Your Ecommerce Site & The Customer's Credit Card Processing System.

You may be wondering: what is a payment gateway, anyway? A payment gateway intermediates your eCommerce site and the customer's credit card processing system. It provides a secure interface between you and your customers, allowing them to make payments from their checking accounts or credit cards without having to share their payment information with you directly. Suppose anyone steals this data from your website (or even tries). In that case, they can't access anyone's personal information because it's stored on the back end of the payment gateway system instead of yours.

The Payment Gateway Connects Your Website With The Bank Of The Customer That Is Issuing Payment To Your Ecommerce Store.

Payment gateways are the middle man between you, the merchant, and the customer. They provide an interface between your eCommerce site and the customer's credit card processing system. This is where to drop shippers get into trouble.

Payment gateways connect your website to the bank of the customer that is issuing payment to your eCommerce store. The payment gateway validates who they are with their bank (by checking their driver's license or Social Security number) before allowing them to purchase on your website. This prevents fraud in which someone could buy items using stolen credit cards; however, this process also rejects drop shippers because they don't have access to any banks and, therefore, cannot be validated by a payment gateway.

Payment Gateways Act As Security Buffers Between The Merchant And The Customer.

Payment gateways create a buffer between the merchant and the customer. The payment gateway is essentially an intermediary that protects all parties involved in a transaction from potential fraud.

This way, payment gateways act as a security measure for merchants and customers. For example, if your business sells expensive items like furniture or jewelry online, you would want to protect yourself from losing money by not knowing who is purchasing these products from you. This can be done through 3D Secure authentication, which requires users to enter their credit card information during checkout and then calls their bank for approval before purchasing. However, this type of fraudulent protection may cause drop shippers with only one or two products on their site (like art prints) to decline when trying to drop ship with certain merchants (such as Amazon).

Payment Gateways Protect Customers From Scammers And Thieves By Blocking Drop Shippers From Using Their Services.

Payment gateways are responsible for protecting their customers from fraud. They must ensure that anyone who wishes to use their services is legitimate and honest, which is why they reject drop shippers.

Drop shippers are notorious for being fraudulent, so payment gateways want to avoid being associated with them at all costs. The Payment Card Industry-Data Security Standard (PCI DSS) requires payment service providers (PSPs) like Visa or Mastercard not only to accept merchants into their system but also to ensure they are legitimate before allowing them access to cardholder data. If you're an online retailer trying to get accepted into these networks, it can take months of paperwork and vetting by third parties before your account is approved.

This level of scrutiny helps protect customers from scammers and thieves who want nothing more than their credit card information so they can steal money from innocent victims – not something any legitimate merchant wants on their record!

Payment Gateways Don't Like Working With Drop Shippers Because They're High-Risk Merchants.

Drop shippers are considered to be a higher risk for two reasons: 1) they don't have a business relationship with their customers, and 2) they don't have a business relationship with their suppliers either.

So there you have it. We hope this article has helped you to understand why payment gateways aren't so keen on drop shippers. Payment gateways are designed to protect customers from fraud and theft, which makes them wary of working with merchants who don't have a physical presence or address where they can be held accountable for their actions.

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