The Benefits Of Opening A High Risk Merchant Account

Jun 23, 2020

A high-risk merchant account is an invaluable tool to bolster an online presence and win more customers.

A high risk merchant account is a type of payment processing account that caters to businesses that are considered high risk by banks. What makes a business high risk is the tendency of experiencing chargebacks. As a result, these high risk businesses are subject to higher than normal fees. Other contributing factors include the industry’s reputation as well as its processing history. Typically, the recommendation is to keep the chargeback ratio lower than 0.9% of total transactions. 

Benefits Of High Risk Merchant Accounts According To Experts

According to financial experts, one of the key advantages of opening a high risk merchant account is the ability to expand its operations globally. 

Mark Sands, CEO and founder of High Risk Merchant Account, LLC, agreed that many businesses are opening this type of account in order to expand their reach on a global scale. He added that high risk merchant accounts offer high chargeback protection for most businesses that fall into the high risk category. 

Furthermore, by opening a high risk merchant account, it grants the business access to larger markets, with the opportunity to accept payments in a variety of currencies in countries that are low-risk. It also provides the liberty to sell more products and services to their clients. With the ability to sell more comes more growth opportunities for the business. 

With expansion comes more profit for high risk businesses. Luckily, the increasing demand for high risk merchant accounts has also seen a surge of new high risk merchant account providers ready to serve their clients. 

Another great benefit of having a high risk merchant account is that any chargebacks will not mean closure to the account. 

Ready To Open A High Risk Merchant Account? Look For These Considerations

As stated previously, the increasing demand for high risk merchant accounts means that more of these services are popping up, eager to get high risk clients into their door. But do watch out. It is best to take the time to thoroughly research and review these companies to ensure you are working with a professional, reliable, and reputable company. Take a look at these considerations before you make your choice:

  • Support – This is a critical component when it comes to choosing the right merchant account provider. Are they responsive? Do they get back to you in a timely manner? Things can easily go amiss online and you need someone on the other end to be ready to lend you a hand. Ensure that all of your questions and issues will be resolved. 
  • Clear pricing – Although many pricing structures are not readily displayed on the merchant account provider website, do look for those that do. If not, seek out the exact information about fees and any added costs. Ensure that there are no extra or hidden fees. 
  • Security – As a high risk merchant, you need a payment provider that follows stringent security guidelines and offers anti-fraud solutions that will stave off fraudsters. Ensure they offer a good chargeback prevention system as well as a “multilayered approach” for security. 
  • Read the contract – Normally, the merchant account provider does not provide a sample of their contract on their website, however, do obtain a copy from them. Also, get their terms and conditions and read them all carefully before you decide to sign up.

To Sum Up

High risk merchant accounts are definitely your vehicle to global expansion and an increase in sales. But before you choose just any high risk merchant provider that claims to serve the high risk industry, do take the time to carefully research their reputation and performance with other high risk businesses. If necessary, hire a lawyer to help you carefully examine their contract, terms, and conditions.

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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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