Everything you need to know about high-risk merchant services
The nature of business determines whether a merchant is a high or low risk. Most
restrict or deny high-risk merchants based on this alone.
Everything you need to know about high-risk merchant services
Most merchants are considered low risk while others high risk. A low-risk merchant has high chances of approval for a merchant account.
As for the high-risk ones, they face several challenges before they open their account.
Either way, the two groups of merchants can open an account.
Every business should accept credit cards for purchases or payments. Failure to do so can make your business lose lots of clients and revenue. That being said, every high-risk merchant should have a merchant account and accept credit cards.
How to select a high-risk merchant services provider
When selecting a high-risk merchant provider, ensure you go through every documentation and application provided. Not only going through but understanding each detail as well. These details entail miscellaneous charges, fees, taxes, notes, and fine prints.
Likewise, understand the reserves connected to the said account. If you have questions, feel free to raise them and ensure you get answers. Notable, each merchant service provides has unique charges and fees for each business. Therefore, you should ascertain that the provider classifies you rightly, as you are supposed to be. In addition, spare some time to view each facet of opening a high-risk merchant account. Just keep in mind that this type of account will take longer than a normal account. But the benefit of a merchant account is worth the wait. Online high-risk merchant services.
Most people fear using their credit accounts online. This is because there is no physical presentation of the credit card. Combining online scams with risk elements make e-commerce venture a high-risk business. This warrants businesses high transaction charges and fees. However, using credit cards on the internet is more convenient than electronic transfers or PayPal.
If your business doesn’t accept credit cards online, it might lose credibility. Also, the chances of a visitor to make a purchase will reduce. As a result, your online revenue will reduce.
What does it mean to be high risk?
Have you been denied a merchant account because someone deems you as high risk? Well, that should not be the end of the road. You can try out a different service provider. The good thing is that there are merchant account providers that offer high-risk accounts. Though, you must adhere to their reserves or terms for funding. Perhaps, you have no idea what makes you high risk.
If your business falls under these categories, then you are a high-risk merchant.
- Your company isn’t registered but with a local regulatory agency. Similarly, merchant agencies might have blacklisted it. This is possible because of bankruptcy or fraudulent activities.
- The business deals with high-risk operations such as pharmaceuticals, downloadable software and ticketing.
- The company has a huge amount of sale with a need for future delivery. Future deliveries are naturally risky. It means customers pay for the goods but receive them at a later date. If your company happens to close down or go bankrupt, then your cardholders would not receive their good as well as their payments.
- The business is incorporated in a country, while it’s owned by a business located in a different country.
How to benefit from a high-risk merchant account
Do you own an online business? Do you desire to increase your online presence while at the same time attract customer? If so, you probably should sign up for a high-risk merchant account. This will let you enjoy several benefits.
First, a high-risk account will help you redeem your financial position. So if you have faced financial challenges in the past, open this account. It is a great opportunity for your business to get back on the right track.
Soon your business will start making profits. On the same note, a high-risk account can benefit those businesses that pose some risks to their clients. For instance, lenders might view an online medication dispensary as high risk.
Therefore, for such a business to get a traditional merchant account would be impossible.
Well, with a high-risk merchant account, such a business can get the funds it requires. In addition, such a high-risk account has a streamlined, easy set-up process. This feature is really attractive to many businesses.
So, if you provide different services, you can take advantage of a high-risk account. You can get online and make an application. And within a day, your account will be approved.
As a result, your business will hit the ground instantly. When you get a high-risk account, you’ll be able to accept distinct kinds of payment. In doing so, you’ll be able to provide different payment choice to your clients. As a result, the customers will buy your products/services in the most convenient way possible.
A merchant account will protect your business against clients who might attempt to defraud it when they use invalid credit cards or bad cheques. Finally, a high-risk account will protect your business against chargebacks. It will secure you from fraudulent behaviours. However, the service provider might require you to open an account, set some reserve fund. In the case of chargebacks, they will be deducted from this account.
Charges with a high-risk merchant account
Every high-risk business that qualified to open a merchant account will pay higher fees than low-risk businesses. This is because the service provider takes the risk of approving a high-risk company.
As mentioned earlier, high-risk businesses have an uncertain credit history, future deliveries, and chargeback rates. The fee you’ll pay for setting up the account will be high. Additionally, the processing fees will be on the higher side.
The bottom line
As you have learned, you can still open a merchant account even if your business is classified as high-risk. Therefore, you can still process credit cards for your business.
Hence, you continue with your operations as normal. All you have to do is to submit your application from the best high-risk merchant service provider and get one for your business.