In the payment processing world, some businesses and business industries are considered “risky.” If you’re one of them, you’ve probably already been turned down by a couple of processors. But, all is not lost. High-risk merchant account providers exist, and they’re out there ready to cater to your exact needs.
That said, merchants seeking for high-risk payment processing typically have a few questions lingering in their minds, and unsurprisingly, one of the most common is how much a high-risk merchant account will cost.
If you’re among the many merchants wondering whether the ability to accept cashless payments from your customers will be worth the fees that come with high-risk processing, you’ve come to the right place.
Why are high-risk merchant accounts expensive?
It may not seem so to you, but payment processors are like any other type of business, including yours. Like you, a processor’s primary goal is profit, and that means partnering with merchants that will make them money with as few complications as possible.
If you run a high-risk business, therefore, processing firms will think twice before shaking your hand. Some companies will be less reluctant than others, depending on their risk evaluation (underwriting) guidelines, but any firm that signs you up for a merchant account will be accepting you as a potential financial liability, and you will have to do something make the deal worth their while.
So, acquiring high-risk payment processing services often means accepting the hefty fees that come with them, and how they will affect your bottom line.
How much will you pay?
High-risk merchant accounts come in many shapes and forms, but they will all be significantly more expensive than regular accounts. Ideally, a large, established business that enjoys high customer traffic and processes a large number of daily transactions will pay less for a high-risk merchant account than a startup or SME. The same goes for a merchant with a decent credit score and good history with other processors.
On the other hand, a business that has been labeled high-risk because of a combination of reasons, say, a startup that deals with international customers and is at odds with the law will pay heavily for a merchant account.
Therefore, while it’s difficult to say precisely how much high-risk payment processing will cost you, evaluating the risk factors of your business can give you a reasonable idea of what to expect.
Keeping the fees low
The cost of processing cashless payments can weigh heavily on your high-risk business, but that doesn’t mean the situation is helpless. One thing to keep in mind is that processors evaluate the “riskiness” of merchants differently, which means that while one firm may consider you a red risk, another may only see you as a blue one.
A bit of research will ensure you find a processor that offers the high-risk merchant account you need at a reasonable rate. And, don’t forget to read your contract carefully, to make sure it doesn’t have any unmentioned fees hidden in fine print.