Most traditional payment processors say no to high risk merchants. But a few trailblazers in the high risk market say that these businesses are worth the risk. Michael Foy of International Merchant Processing Solutions in Belize has dedicated his entire company to providing processing services to the types of merchants that most U.S. banks won’t touch. These businesses range from adult content and ecommerce to timeshare properties and weight loss supplements. So if high risk businesses are such a hot commodity, why don’t more processors invest in them?
The problem is that high risk merchants have higher instances of bankruptcy, fraud, litigation, chargebacks and data security breaches. But if acquirers are willing to take a chance, their profits can be astronomical. Foy recounts that many of his businesses make $500,000 to $1 million in volume each month, making them worth the risks.
Despite the promises of profits, individuals interested in high risk businesses may have a hard time finding a reputable payment processor. When Foy began his processing company, it took a while to find a bank to work with. But once he found a processor, his residuals multiplied 100 times. Even though his profits soared, his merchant account was shut down after only a few months. Since then Foy like many other high risk merchants, turned to offshore payment processors for help.
But high risk merchants who turn to offshore accounts will spend more money on the average merchant transaction than they would with domestic accounts. ISOs usually make about 10 basis points on most merchant transactions, but many offshore payment processors charge high risk merchants an extra 1% to 3% because payment services are hard to find. On top of this, merchants also pay 2.5% or even 3.5% more in fees than in the U.S. with offshore accounts.
High risk businesses are extremely lucrative, but most business owners have a hard time securing payment processing. As a result, many turn to offshore processors who charge high fees. eMerchantBroker.com is a low hassle, low cost payment processor that will build and manage your high risk merchant account and won’t strip you of your profits. Our agents will protect your transactions and increase your profits.