How Much Will a High-Risk Merchant Account Cost Your Business?

Dec 07, 2017

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.

Let us help you get a high risk merchant account today!

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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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