High-risk merchants face many challenges. Depending on the industry they serve, they may grapple with unusually high rates of chargebacks, friendly fraud, missed or late payments, just to name a few. All of these issues can lead to higher than average fees and require more time and energy from payment processors to successfully manage these high risk merchant accounts.
These are just some of the reasons why both payment processors and financial institutions choose to simply avoid these types of businesses. They would rather just steer clear of all the risks associated with these businesses.
At the end of the day, high-risk merchants need to find a reliable payment processing solution that will allow them to get paid on a consistent basis, safely, and on time by clients. It is only by securing a solid payment service provider that a high risk merchant can have seamless payments, optimizing business growth, and potentially boosting their profit margin.
Why A High-Risk Merchant Account?
As previously mentioned, high-risk merchants have to contend with a variety of issues, making themselves a less-than-attractive client for most payment processors. Another stumbling block that high-risk merchants must avoid are the unsavory, opportunistic high-risk payment processors that promise to rescue desperate high-risk merchants from potential failure.
Unfortunately, this bail outcomes with a price. These costs come in the form of charging very steep rates, unfair if not abusive contract terms, and just overly marked-up prices for their services.
What high-risk merchants need is a high-risk merchant account provider that understands the industry well. A high-risk merchant account is a necessary payment processing solution that is well-equipped to handle the higher risk for chargebacks, fraud, or a significantly higher volume of returns.
Although high-risk merchants do pay a higher amount of fees across the board for services, it should only be higher than the average, low-risk merchant account.
Not Just A Contract But A Partnership
It’s easy to search Google and find high-risk merchant account providers with the highest reviews. It should not end here.
High-risk merchants should approach the search for the best high-risk merchant account provider with a more strategic plan. Keep in mind that your payment provider is not just another service provider to make your business work and help you bring in revenue. It should be a mutually beneficial and collaborative arrangement.
Also, don’t be lured by who offers the best price point. Most high-risk payment providers use custom pricing to best suit your business needs and risk factors. It would be greatly beneficial if you take the time to book a consultation with the company’s representative to fully discuss these details.
In addition to price, other points of discussion during your first meeting should cover the following:
- What type of experience does the provider have with your vertical and what type of support should you expect to receive during this partnership?
- How long can you expect to wait to access your funds?
- Will there be a reserve requirement?
- Under what conditions can your terms of agreement change? If for example, your chargebacks supersede a predetermined threshold, are you required to pay higher fees?
All of these aforementioned details should be discussed thoroughly before a single application is submitted.
Choose The Best Provider For Your Business
As there are many high-risk payment processors out in the market today, do not be lured by slick marketing tactics that can bind you to an unfavorable partnership. The right provider will have many years of experience dealing with your vertical, have the best banking partnerships to ensure the right fit, and offer the best customer service.
All of these components will ensure that you will be paid on time, safely, and have peace of mind. This is the best partnership a high-risk merchant can have.