Does Being a High Risk Merchant Mean You Are a High Risk Person?

Nov 20, 2014

You decided to start your own company. It does not matter if you are a brick-and-mortar business or an e-Commerce merchant, in order to make as much money as possible you need to be able to process credit and debit cards. Perhaps you have applied at several old-line processors and maybe your own bank, but all you hear is that you are high risk and need a high risk merchant account. And they all declined you.

At first glance, this can hurt your feelings of self-worth and you wonder why you are being singled out as high risk. Your credit rating isn’t the best, but it isn’t the worst, either. You have not been convicted of a crime and you certainly haven’t been involved in any money laundering. You even go to church every Sunday. Why do they all say you are high risk?

Needing a high risk merchant account does not mean you are a high risk individual. However, someone with really poor credit may be considered to have high risk potential. When you are informed you are high risk it is all dependent on the type of industry you will be serving. The card associations, not the processor, decides which industries are considered high risk. And you would be surprised at some of the seemingly innocuous businesses that are on the hit list.

Maybe you have a dating site for senior citizens or people of a certain religion. Unfortunately, this is considered in the adult class which also includes adult toys, sex videos, and other adult industries. Since this industry reaps billions of dollars in sales annually, it can’t be all that bad as a business, right? The card associations judge an industry by the number of chargebacks and disputes. If you are in an industry where over 3% of your customers say they didn’t like your product or service, or they did not make the charge at all, you are at high risk.

Perhaps you have decided to sell vitamins, minerals, and supplements online. Your products are meant to keep people healthy. How can that be high risk? The card associations look long and hard at nutraceuticals and consider them high risk merchant accounts. One problem or issue is that the industry as a whole is not regulated by the federal government. There are plenty of devious people out there making false claims about their products – especially when it comes to weight loss. Customers will claim that the product did not do what was advertised and there is a landslide of chargebacks. This affects the business owner who just wants to sell vitamins and minerals. You are all classified together.

Know that you are not a high risk person; you just need a high risk merchant account. Your best option is to choose a processor that is a high risk expert and understands the trials and tribulations of your individual industry. This processor could have your account opened within 48 hours. There are no application fees. There generally are no setup fees. There are safe, secure gateway options. And you do not have to have your own Visa and MasterCard license.


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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.

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