High-Risk Merchant Account For High-Risk Businesses
Let’s begin with the simple part that a high-risk merchant typically refers to as one that is regarded as more disposed to chargebacks or fraud. This can be because of the nature of their business, their unique upright, or other aspects.
These are the most common high-risk industries.
l
Online gambling
l
Adult material
l
Credit Repair
Services
l
Travel
l
Nutraceuticals
l
CBD, Vape shops
l
Phone services
l
Multi-level
marketing and direct sales
l
Software downloads
l Health and wellness products, etc.
Furthermore, many other businesses regard as high-risk businesses due to their business type or their recent activities such as.
l
They can be new to
the business that hasn’t yet processed any transactions. Because when there is
no record to move. You are involving some kind of risk.
l
If, they have a low
credit score.
l
They are deemed as
high-risk due to working out of their country and not in a brick-and-mortar
location. They are regarded as less legitimate. And it is more difficult to
contact if there are any payment issues.
l
If they are
executing business globally and are therefore labeled as riskier. Hence there
are no similar rules and regulations around payment transactions in other
countries.
l They have a high ratio of average online transactions. For instance, if they process more than $20,000 payments monthly, or if their average transaction is more than $500. Then a lot of risks are involved in your business.
Those who are processing online transactions from high-risk businesses can face reputational harm from often payment issues. Hence there is a high risk involved in processing their transactions. This tends to the businesses that require special attention, oversight, and complete underwriting from payment processors. This can also lead to higher processing fees as compared to other businesses.
Let’s explore some of the most common advantages.
1. Improved payment
options. Low-risk merchant accounts are typically only enabling to
receive some specific sorts of credit card payments. This is not the situation
with high-risk
merchant accounts. Instead, they offer other options such as recurring
payments. They can also adopt high sales for instants like special sales or
product launches.
2. Extended payment opportunities. Having a high-risk merchant account also enables the merchant to receive payments across the globe. This connection with the restrictions stayed on typical merchant accounts that typically only adopt payments from certain countries.
What is the cost of a high-risk merchant account?
Generally, there are zero flat fees that high-risk merchants are assessed. Instead, every payment processor costs different charges. Merchants require to shop across various payment processors to get the best price for their online business.
But before signing a contract, it is essential to explore what to ignore in a credit card processing contract to save money and efforts from some payment processors who are keen to take advantage of high-risk merchant accounts.
How to acquire a high-risk merchant account?
The processing of payments from these merchants is regarded as risky. The best thing to perform when applying for a high-risk merchant account is to focus on why the business should be trusted. These details can consist of a cover letter that accomplishes the application.
For instance, are there industry professionals have involvement in the business? Does the business have something amazing that it will make it less sensitive to fraudulent transactions? Can they offer a valid reason for high trading volumes or higher average transaction volumes? Providing aspects like these can provide an increment in the merchant’s approval rate.
Can I switch to a low-risk merchant account?
Just because your online business is regarded as high-risk doesn’t refer that you will always be high-risk. This is because the reasons behind regarding a business at high-risk are not permanent.
As above-mentioned factors of labeling as
high-risk contain deficiency of history in receiving payments or a low credit
score. Both of them can significantly and quickly change over time. So, if you
can enhance either or both of these implications. Similarly, you can see this
as low risk in the future.
Wrapping Up
High-risk merchant accounts are for businesses that are potentially having a high volume of fraud or chargebacks relevant to taking credit card payments. These merchants pay extra for processing because of the higher amount of effort involved in ensuring their payment transactions are approved.
Although, there are also some benefits of
high-risk merchant accounts. WebPays constantly operates with high-risk merchants
to deliver the best prices in the payment industry. For further information and
to connect with the best payment service providers, contact us today and get
our best services and start saving money from the beginning.
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