If you’re an online business seeking to boost your online presence and gain more customers, you may have considered signing up for a high-risk merchant account. And that’s with good reason: there are lots of great benefits to this type of account. Let’s look at those benefits a little more closely.
Most often, businesses who choose to open this type of high-risk account do so because they have fallen on financial hard times in the past, such as defaulting on a previous loan from a bank or being in significant debt. High-risk merchant accounts are designed to help companies get back on their feet financially when other, more traditional financial channels may not be available. It is seen as a second chance for many businesses to get back on the right path and start making a profit again.
On the flip side, a high-risk merchant account is also beneficial to those types of businesses that pose a certain measure of risk to their customers, simply by the nature of their business. Online medication dispensaries, for example, may be viewed by other types of lenders to be a high risk. For those types of businesses, getting a traditional merchant account may not be possible. High-risk merchant accounts are designed to provide the funds to these types of businesses.
Another benefit to this type of high-risk account is that they have an easy, streamlined set-up process. This is an appealing option to many companies, but especially those that offer a variety of services. The process can typically be done online and in many cases the application will be approved within 24 hours, allowing the company to hit the ground running very quickly.
High-risk merchant accounts allow companies to accept different types of payment, which can be very useful to a company because it allows them to offer a variety of payment options to their customers, making buying from them as convenient as possible, including cheques. Not only that, but these accounts also offer protection to the company against customers who try to defraud them by using bad cheques or invalid credit cards.
A further benefit of a high-risk merchant account is protection against chargebacks. When a chargeback happens on a high-risk account, protections are in place to protect against fraudulent behaviours. In most cases, the provider of a high-risk merchant account will require the business opening the account to set up a reserve fund so that any chargebacks can be drawn from this account. The amount of the fund is typically set at a pre-determined percentage of the company’s average per-month sales, but this amount is mitigated by several factors.
If you’re a company looking to set up a digital presence online, you’re going to need to create a way for customers to pay for your products and services easily and conveniently. Unfortunately, for companies who have a less-than-stellar financial past finding a traditional merchant account vendor who is willing to take the risk on them may not be easy. A high-risk merchant account offers companies that safety net, the kind of second chance that many companies need to get back on track and to start becoming the profitable business they can be.