Starting a new business can be a difficult, but rewarding process. Unfortunately, not every business is treated equally. If our business is considered high-risk, then you may have considerable trouble finding a bank to process payments from your clients. This means your business will have to deal almost exclusively in cash. Luckily, there are a few solutions for high risk merchants to increase their payment methods. The following are indicators that your business is high risk.
Banks and other financial institutions have the same criteria for determining the risk status of a new business. In general if your business has a high level of charge backs, refunds and credit card fraud, and returns it will be classified as high-risk. To mitigate this risk, talk to your ISO as they should be following standardized guidelines to recognize and monitor signs of fraud. Ensure that you keep a negative database that cross references the IP addresses of customers and other information to track suspicious activity and web traffic.
In addition if you have a history of bad credit or no collateral for loans, you will be classified as high risk.
The following are a few major industries that are considered high risk:
- Bad Credit Assistance
- Credit Repair
- Technical Support
- Adult Industry
- Compliance Requirements
If your business is considered a high-risk, you will almost assuredly pay a higher loan rate, and have to make higher down payments. If your business is high-risk, your insurer could possibly charge higher premiums to cover the risks of doing business with your company. For example, many high-risk companies pay higher premiums for error and omissions insurance. In addition, your business may be vulnerable to lawsuits and penalties if you are non-compliant with federal and local laws. So knowing your status, and the rules that come with it, are extremely important to your continued existence and financial security.
Today high risk companies must rely on credible third party payment processors that specialize in high risk business, if they are unable to secure traditional processing. eMerchantBroker.com is a low hassle, low cost payment processor that will partner with you to grow your high risk merchant account with expertise and skill. eMerchantBroker.com agents will increase your profits and protect your transactions.