Gallatin, TN (PressExposure) January 24, 2012 -- The Empower Network company, launched on Oct. 31st, 2011 began with the idea that all Empower Network affiliates would acquire their own merchant account for the purposes of receiving their affiliate commission payments. This was a good theory as Empower Network intended to pay out 100% commissions and such a thing is nearly impossible to do when a company has to cover the expense of administration for payroll.
By having each affiliate apply for their own merchant account and receive payments directly this allows Empower Network the administrative savings needed in order to continue with the 100% affiliate commission model.
Empower Network ran into trouble with this however in November of 2011.
First Data Merchant Services, with which Empower Network had established a business agreement, decided to pull the plug on all Empower Network merchant applications. The rumor is that First Data was not capable of handling the enormous volume of merchant account applications, which at that time was only a few hundred new applications per day. Empower Network found David Wood stated, "We need a merchant account provider that can handle our massive growth and who can process as many as 2000 new merchant applications per day..."
One would wonder why this was not taken into consideration when the agreement was established with First Data Merchant Services.
Many Empower Network affiliates were disgruntled by this situation. Some affiliates were waiting for 4 to 5 weeks with no response at all from First Data on their pending merchant account applications, only to find out later that this relationship had been terminated. Thus began a month-long hunt for a merchant account processor who was willing to work with Empower Network.
The end result is CardFlex.
According to a recent LiveStream broadcast done by Empower Network founders David Wood and David Sharp the company only had to put up a $100K reserve with CardFlex in order to make this happen.
Regardless of the intentions of the Empower Network founders and affiliates this business model is considered high-risk and it is suspected that Empower Network was scraping the bottom of the barrel for option on their merchant account processing. Many merchant services providers would consider Empower Network to be network marketing or a "Get Rich Quick" operation and since banks mainly deal in managing risk, most likely there was not a huge rush of banks knocking down the door to do business with Empower Network.
Over the next several months we will see whether the CardFlex solution is going to stick or whether Empower Network affiliates will once again find themselves out of business for lack of ability to transact due to missing merchant services.
Certainly affiliates are able to use PayPal and Alertpay to transact however PayPal is not at all friendly to Empower Network's business model and is hardly a permanent solution.