Protecting Your eCommerce High-risk from Reverse Charges

Nov 20, 2019

Taking credit card payments is the order of things when it comes to online customer-retailer relations.

And to be able to accept cards, debit or credit, you must have access to a merchant account. Normal businesses will find many willing merchant account providers but those classified as high-risk for one reason or another must hassle hard or look in the right place to start processing online payments.

Understanding High-Risk Merchant Accounts

A company or business could be listed as high-risk for many reasons, but it often comes down to two main reasons.

  • High chargeback rates, meaning your business initiates many reverse payments due to customer claims
  • Selling highly-controlled goods or services such as e-cigarettes and adult content.

These accounts usually come with higher fees than standard accounts and their providers take these measures to protect their bottom line in case you run out of business and liquidate.

Because the payment processor and account provider carry most of the risk in each payment, they charge businesses sky-high premiums on top of interchange fees—that goes to card networks.

We know chargebacks are a sticking point when it comes to high-risk sectors. Yet every business must keep reverse charges to a minimum to remain profitable.

But how do you go about it?

Reducing Reverse Charges in Your High-risk Business

Merchants can follow the following tips to trim down the cases of chargebacks in their e-commerce premises.

Transparency is key

Unclear, incomplete and misguided product or service descriptions are the common reasons most businesses receive many reverse charge requests.

Obvious at it seems, many brands leave details that customers use as excuses to file chargeback claims. Be as detailed about your products as possible.

Provide all sorts of informative content to enlighten your customer base. The more people know, the better purchase choices they make, and the lesser the possibilities of filing chargeback claims.

Stick to Your Official Merchant or Business Name

Use your official merchant or business name in your transactions and across all contact points with customers.

This is the name shoppers see on their credit card report. If it is stranger than they expect, they may file a reverse charge request and raise claims that they don’t recognize the company behind the charge.

Pay attention to detail

Detail is key in detecting reverse charge fraud because of the long-distance shopper-merchant relationship.

CNP fraud is common, and so are chargebacks rates because the business owner does not inquire more to see the person behind the purchase.

Look into all verifying details and add several reasonable layers of authentication to stay safe.

Wrapping Up

Protecting your business from reverse charges is a continuous process. The merchant’s role is to check the possible cause and take corrective measures.

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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