High-Risk Merchants Can Clear Compliance Obstacles Easily

Mar 30, 2022

One of the keys to success for an online merchant is to provide the best, most seamless shopping experience for their customers. This is an especially vital component for high-risk merchants. 

If high-risk merchants commit any sort of gaffe in this arena, they could be saddled with licensing, legal, and other compliance nightmares that could close their operations down for good. 

Overcoming Compliance Hurdles

Merchants that operate in stock trading, foreign exchange trading sectors, and gambling, are experiencing mounting regulatory barriers that are increasingly placing them at risk for compliance failure.

One of the biggest obstacles that high-risk merchants must contend with is obtaining a license. Banks and payment providers demand this as they typically shy away from servicing high-risk merchants and industries. 

For the high-risk merchant, they benefit as well, as it usually translates into higher rates of approval, lower processing costs, and having a better opinion from these providers and banks. 

Local licenses require more investments to set up shop locally. This can come in the form of hiring local staff. Additional regulatory burdens can also be required, such as being subjected to regulatory audits, performed periodically. Extensive reporting can also be another feature tied to applying for local licenses. 

Depending on the market, such licenses can eat up as much as 30% of a merchant’s “pre-launch expenses”. Even after the license has been purchased, merchants must be extra mindful of the duration of the license and ensure that their license does not expire. Allowing it to expire means exorbitant costs to pay. 

There Is A Solution

In order for high-risk merchants to grow their operations in the betting, forex trading, or share trading sector, they must win the trust of their customers. All types of fund deposits, settlements, and withdrawals must be cleared immediately. If a customer is forced to wait for their funds, they will not return to this particular merchant. 

Also, in order to guarantee speedy funds transfers, the payment platform that the merchant must choose should be one that is dependable, stable, with the capacity to handle peaks in both transaction volumes and “capacity demands.” The payment gateway chosen must handle any type of unexpected surges in use. If these systems fail during these surges, conversions will surely suffer.

Merchants should not have to worry about compliance, licensing, or KYC (Know Your Customer) requirements for onboarding, on their own. By employing a professional payment solution provider, all of these operations can be automated. This will greatly simplify the administrative process, speed up customer acquisition, and make sure that the merchant remains compliant throughout the life of their business. 

If a merchant wishes to expand their operations into new markets, their payment provider will already be well-versed in the compliance requirements. This will give merchants a much-needed boost and upper hand, expediting their operational launch. 

Having a “unified platform solution” means having all types of payment methods available, which eliminates the need for having relationships with multiple acquirers. This will also eradicate any hidden costs from their payment provider. 

Merchants must look out for clear and transparent platform pricing. It should include an extensive, global network of payment method providers. This will greatly facilitate both settlements and funds transfers to bank accounts, currency conversions, and vendor payments.

Other features that should be standard include transaction monitoring, data encryption, anti-fraud management, and PCI DSS compliance. This will ensure customer funds will be safe. 

High-Risk Merchants Can Overcome Compliance Obstacles

Although the great effort required to remain in compliance can be daunting, a high-risk merchant should not be concerned.  With all of the aforementioned systems in place with an expert payment services provider, a merchant can be confident, knowing that their provider will assist them in handling all compliance issues, in order to pursue more growth and revenue.

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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.