The Advantages To High Risk Merchant Accounts

Apr 22, 2020

As a high risk merchant, you are faced with many challenges, especially if you plan to up your online strategy by accepting credit and debit card payments. In order to accept credit card payments, you would need to secure a high risk merchant account. Since you are considered high risk, payment processors automatically flag you as a risk for potential fraud. It can be due to the type of business you engage in or if you have a history of bad credit. It could also be because your ideal customer could potentially present risks of fraud.

The types of businesses that are typically categorized as high risk include the adult industry, online gaming sites, vape and e-cigarette shops. 

High risk merchant account providers essentially give high risk merchants an opportunity that is typically denied to them by traditional merchant account providers. 

There are plenty of advantages to go with a high risk merchant account to provide all of your card processing needs. Let’s take a look at some:

Advantages of High Risk Merchant Accounts

  • Specialization in High Risk

Without a doubt, running a high risk business has its own set of challenges and regulations that it must navigate through. High risk merchant account providers are equipped with sales staff that specializes in the high risk industry. They are trained and experienced with dealing with all the nuances within a high risk merchant account. If you are new in the industry, it is imperative to have trustworthy and knowledgeable experts at the ready whenever you need assistance.

  • Less Worry About Chargebacks

Typically within a traditional merchant account, an excessive amount of chargebacks could potentially shut down the account permanently. Not so with a high risk merchant account. Since the merchant is already high risk, the merchant account provider is already setup to meet chargebacks and fraud head on. The preventative measures providers use include requiring the high risk merchant to have a reserve fund so that any chargebacks can be withdrawn from that fund. It is usually a predetermined percentage of the company’s average per month sales. There are also protections and detection tools in place to mitigate fraud on these high risk merchant accounts.

  • You’ll Earn More

Not only will high risk merchant account providers enable you to process credit and debit card payments, but you will also have the ability to process high volume sales as well as grow your online influence. Traditional, low-risk processors enforce limitations on both money and spending. However, not only can high risk merchants sell to more regions, they can also sell in multiple currencies. This can catapult your business to a greater earning potential.

Do Your Research

With many businesses touting themselves as “high risk merchant account providers”, it is imperative that you do your research to make sure that these providers are true specialists in their field. Ensure that they have competent and knowledgeable staff that is eager to answer your questions. Also, make sure their terms and conditions are reasonable.

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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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