Insurance for High Risk Businesses | The Difficult World of Payment Processing

Jun 22, 2016

In a blog post by UniBul, the company shared their thoughts on the situation for high risk businesses, “Almost immediately after we shifted our focus at UniBul toward the high-risk part of the credit card processing industry several years ago, we realized that this was an entirely different kind of thing from the mainstream end of the payments spectrum. Everything was completely different and the rules that applied to, say a convenience store, had nothing in common with the ones bearing on, say, an adult website.”

Small businesses, startups and any other business type considered to be “high risk” have been and continue to struggle to secure the payment processing solutions they need. Even if a business follows everything it’s supposed to with existing rules and regulations and stays off of Visa’s and/or MasterCard’s black list, it is still a challenge. Why? The biggest hurdle these business must overcome is the ability to consistently overcome a low chargeback rate. This has resulted in a lot of legitimate, promising merchants are turned down.

Realizing something needed to change, UniBul turned a concept that has been around for centuries into something that can help high risk industries – insurance. UniBul shared that it can now offer 100-percent coverage and satisfaction on every product or service that a consumer purchases on their website. The insurance provider pays all claims within a 5-7 day period, and the solution is available to merchants on both sides of the Atlantic.

The beauty of this offer for merchants is that it can cut chargebacks in half, which is the main reason why they struggle to secure a merchant account and payment processing in the first place. How is that possible? Consider UniBul’s example of the transaction process:

  1. It starts when your customer makes a payment for a product/service purchase at checkout
  2. The customer’s payment is then processed as two separate transactions. The first is for the purchased item itself. The second is for the insurance associated with the program. The customer sees two separate transactions on her credit card bill.
  3. The program then bills the merchant for the cost of the insurance to complete the cycle.

So, if 100 percent of a merchant’s sales are insured, the number of transactions processed will obviously double automatically. According to UniBul, “as the chargeback rate is calculated as the ratio of total charged back transactions, relative to the total sales transaction count (as opposed to volume), you see that the chargeback ratio is cut in half right there.”

Even as difficult as the world of processing for high risk merchants seems, there are still solutions to make your business run smoother. If you operate a high-risk business, you should look into how an insurance program can benefit you. Don’t let traditional lenders slamming the door in your face stop your business plans. There’s more reasonable options available than you might have previously realized; options that can help your business both thrive and grow.

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 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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