High-risk traders face many challenges, but acquiring a payment processing solution is arguably their biggest. That said, the number of companies offering high-risk merchant accounts is increasing every day. So, as a high-risk merchant, you now have more options than ever before.
But what are options without information?
For you to get the best out of merchant accounts, you need to have sufficient knowledge of how the accounts will benefit your businesses. It is with this in mind that we have pulled our resources together to give you a good view of how the world of high-risk payment processing works.
- What makes a business high-risk?
Providers consider an enterprise high-risk for many reasons. For starters, businesses in industries that have a repetition for frequent chargebacks or fraud are classified as high-risk. Additionally, your operation may be the type to attract stringent supervision from regulatory organizations, or you may have bad credit, or be employing unconventional sales and marketing tactics.
Some businesses are more risk averse than others, and the riskier yours is, the harder it will be to get a merchant account.
- About high-risk payment service companies.
High-risk merchant account providers are many, but no two companies are ever identical. When looking to open an account, the first thing you’ll realize is that while one firm may consider you high-risk, another may not.
Providers have different underwriting guidelines, and whether you get an account or not depends on how strict they are. Firms that specialize in high-risk merchants, are known to have relaxed guidelines and high approval rates for applicants.
- The rates to expect as a high-risk merchant
Although some payment processors have better terms and lower rates than others, high-risk merchant often have to deal with exorbitant fees. Why? Because not only will a provider take up a share of your risk, but they also know your options are limited.
You should, therefore, take the time to review the details of your contract. Check for hidden fees and other incidentals, as well as other services they might be promising to give.
- The importance of your first merchant account application
If you’re a first-time applicant, it is essential to make sure your application is as nearly perfect as can be. Ensure you present all the information and documents required so that you don’t give the provider any obvious reasons to reject your application.
Your first application is important because if you pass your denied request to another provider, on top of considering the high-risk nature of your business, the company will have to question why your previous firm opted against offering you an account. This will further reduce your chances.
Running a high-risk business has its fair share of complications, but this should not be a discouragement. With the information above, you are a step closer to acquiring the merchant account you desire.