Mobile payment apps, wireless terminals, and online payment processing is changing the way retail works with regards to credit and debit card transactions. Any business now needs to have the ability to enable their app-savvy consumer base to make purchases as they peruse a business’ products. There are options available to merchants as to what is the best mobile payment process, but choosing the best option can be a tricky matter.
Traditionally the best approach for credit and debit card payment processing is to set up a merchant account. For high risk merchants, this can be a challenging proposition as the requirements from banks and other merchant service providers can be difficult to fulfill. High risk credit card processing becomes a top priority. This is where high risk merchant accounts from online providers and offshore banks become a major player. Yet, using Square high risk merchants can ditch the wireless terminals in favor of a simple, upfront set up and payment plan.
Square utilizes a $275 per month flat fee 2.75% processing fee per transaction creating a simple, and headache free payment plan for merchants. When compared to high risk credit card processing services with complicated application processes and multiple fees, Square seems like a great choice. However, this simplicity doesn’t always reflect smart finances below skin-level.
The benefit of high risk merchant accounts and credit processing is that the screening for fraud and payment problems begins before, during the application process, while Square is forced to be meticulously cautious with their transactions. For a high risk merchant this means that Square may put a hold on a ‘suspicious’ transaction for multiple days and weeks, depriving your business of profit and constricting your margins significantly. In the high risk sector this is a dangerous proposition. High risk credit payment processing regularly screens and provides your business with its profit within 36 hours.
Additionally, Square’s flat rates work great for high-volume low-price retail transactions. However, if your business offers expensive services, as is common in high risk businesses, and creates large profit margins over the span of a year Square’s flat rates can be more expensive then setting up a merchant account and wireless terminal.
As a high risk merchant it’s your decision and analysis that goes into selecting the correct mobile payment method. High risk credit payment processing and wireless terminals may be cumbersome and ungainly regarding set up and fees, but they pay you back with regular returns on sales by avoiding holds due to suspicious transactions. Square is simple, yet its flat rates can harm a business’ bottom line and leave them vulnerable to dry spells where a hold will prevent them from receiving the funds from a transaction.
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