Digital Payment Processing For High Risk Businesses

Jan 08, 2021

Since the COVID-19 outbreak, many brick and mortar businesses have had to close their doors in order to abide by social distancing restrictions and other state and government-issued lockdowns. 

As a result, consumers have turned to e-Commerce in droves to purchase their goods and services. Because of this new reality, giving customers a straightforward and uncomplicated shopping experience is key to an e-Commerce business’ survival. If there is any type of complication during the customer payment journey, the result will be loss of sales, a consequence no business can afford to deal with.

With the emergence of the pandemic, not only did it intensify the need to better improve the customer online experience, but it also made operating a high risk business much more difficult. 

The Challenges Of High Risk Businesses

High risk businesses, regardless of the global environment, have been subject to freezes, holds, and even terminations from their merchant account providers. Sometimes, the merchant account provider has not done its due diligence to thoroughly screen its clients, only to later discover that they are serving a high risk merchant. This can lead to the aforementioned actions against the merchant, radically cutting off payments and therefore income. 

Many times, the merchant account provider has “overly-automated” its underwriting process, neglecting to notice pertinent information. Even though the merchant did nothing to falsify or “misrepresent” their business, the account provider can arbitrarily terminate the account for violating its terms. 

Both freezes and termination of accounts can also be due to fraud. Fraud has exploded since COVID-19 since fraudsters are taking advantage of the pandemic and the subsequent rise of online purchases. 

What High Risk Businesses Can Do To Process Payments And Reduce Risk

Although high risk businesses are the hardest hit when it comes to having their accounts frozen or terminated, there are some strategies they can implement to reduce this risk.

  • Minimize Risk By Mitigating Chargebacks

A key way to mitigate chargebacks is to provide excellent customer service for any issues or refunds. Using chargeback mitigation tools will also work to keep fraudulent activity at bay.

  • Guard Customer Information

Another key way to greatly reduce the risk of fraud is protecting your customers’ data. Payment Card Industry Compliance (PCI) are the operational and technical standards that a business must abide by to protect their customers’ sensitive information such as credit card information as it is processed for transactions. 

  • Be Honest And Transparent During Underwriting 

Always be upfront with the underwriter about the type of business you are operating, including the goods and services you will be selling. Fill out your application thoroughly, answering all questions completely. By withholding information or later on, selling products and services not initially approved during the underwriting process could end with the termination of your account. 

  • Follow The Law In Your Area

Ensure that you are well-versed in the laws and ordinances of your area and refrain from selling any items that are considered illegal or banned. Know that even then, laws can be unclear and “open to interpretation” by local law enforcement authorities. 

If a high risk business works in an industry that is filled with “vague legislations”, the tools that account providers use might be inadequate and could expose the merchant to compliance issues. This risks putting the merchant’s businesses in danger. 

Know What You Need

It is up to the high risk merchant to become familiar with its particular needs within their high risk industry. This will greatly assist them in choosing the right payment processor that is highly knowledgeable in the merchant’s industry. Not doing so will be placing their business in jeopardy. 

Let us help you get a high risk merchant account today!

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.