Merchant Accounts: Payment Processing for Your High Risk Business

If you are the owner of a business that primarily operates online, and you have a higher risk of chargebacks, you might be looking for a high risk payment gateway to help your business. You might be wondering therefore about the process of applying to a high risk merchant accounts and how it could benefit your business? To increase your chances of getting an account you need to ask to partner with a reputable high risk payment gateway provider, and there are ways you can go about this.

What Are High-Risk Merchant Services?

A high-risk merchant account is simply a payment processing account that is used by businesses that are considered to be high risk to banks. Because a high-risk business is more prone to chargebacks there is a need to pay a higher fee for any merchant services. In these cases, banks might put in place a rolling reserve on the account of the business, covering the possibility of chargebacks or fraud with an amount of money. This occurs with any businesses that have a history of refunds and chargebacks.

Is There a Difference Between High-Risk Merchant Accounts And Low-Risk Services?

Before you begin the application process it is important to understand the difference between the two. Your business will fall into one of the two categories, and this will have a direct impact on categorising your business in terms of potential risk, and the merchant services that you can apply for as a result.

A low-risk merchant – Every payment processor has a different set of guidelines that will determine this, but generally there are some key characteristics that determine what makes a low-risk merchant. If the business has minimised returns, operates out of the EU, UK, USA, Canada, Japan, or Australia, is considered a low-risk industry, and has zero-to-low chargeback ratios.

A high-risk merchant – The more chargebacks that are linked to a business, the higher risk it is perceived to be. The reputation of the industry and the processing history of the business itself are two important factors here in determining a high-risk business. If there is a high monthly sales volume above £20,000, average credit card transactions that are above £500, and there is a reputation within that industry for fraudulent activity, your business might be perceived as high risk. If you have bad credit and excessive chargebacks this is even more likely.

Do I Need a High-Risk Payment Gateway?

If you think of companies that exist within gambling, adult-themed websites, forex trading, and the travel industry, you can see how there are many factors that lead them to be deemed high risk to banks. Any industry that is more likely to encounter fraud and chargebacks are put into this category.

For any businesses that are within one of these specific sectors or industries that are deemed high risk, it is important to look for a partner where you can apply for a high risk payment gateway to secure payments online. A high-risk merchant account that accepts credit card payments on your website will help you to give peace of mind to customers and your shareholders alike. A high-risk business must deal with a higher cost associated with a merchant account that fits their specific needs, as opposed to a regular low-risk merchant account and what those entail.

What Are The Fees Attached to High Risk Merchant Services?

It is important to understand that if you do have a business that is perceived to be high risk, and you apply for a high-risk merchant account, the likelihood is that you’ll be expected to pay the cost to use those services. A high-risk merchant account will have higher fees than a low-risk merchant account – this is completely understandable. Be prepared to pay more in account fees and a higher cost for any processing charges related to the high-risk payment gateway that you use to accept and process credit card payments through your website or app.

The high fees associated with high-risk merchant services is a standard that was set many years ago. You can still find competitive rates within the choice of high-risk merchant accounts though, and those that are tailored to the specifics of both your business and industry. It’s about research and partnering with a high-risk merchant account that you can trust for advice and assistance when you need it most.