What You Need to Know About Your High Risk Business

Jul 20, 2015

They say that big risks can reap even bigger rewards. But sometimes being a high risk business can mean being stopped before you even get a chance to try. A high risk merchant has been classified by the banks as belonging to an industry that has above average chargeback rates and instances of fraud. For example, a customer may make a purchase from a nutraceutical company (a high risk business) then claim that a purchase was made without their knowledge, call their credit card company which will then give them their money back and the customer can keep the merchandise. This process also charges the merchant a fee before the merchant can dispute the claim. Too many chargebacks can become a financial burden to companies, especially small independent businesses.

To combat chargebacks, companies must keep logs and records of customer visits, plus monitor IP address activity of customers who have suspicious activity.

Your business can be classified as high risk for a variety of reasons. Your business can have a low credit score, or be selling goods to individuals outside of your native country. Also if you’re breaking into a new industry, banks and traditional lenders may see it as a higher risk investment to open an account with you, than with a business in a less dynamic industry.

The following are a few major industries that are considered high risk:

  • Gaming
  • Bad Credit Assistance
  • Travel
  • Telecommunications
  • Warranty
  • Technical Support
  • Adult Industry
  • eBooks
  • Electronics
  • Airlines
  • Nutraceutical
  • Credit Repair
  • Compliance Requirements

Just because you are a high risk business, doesn’t mean your business is doomed. Your company could be deemed a low risk enterprise once the bank gets more financial information, or once the business has built up a positive credit history. Sometimes it takes six months to a year before this can happen. Achieving a chargeback percentage less than 1% of total transactions will also take you from a high risk to low risk merchant.

Today high risk companies can depend on credible third party payment processors that specialize in high risk business. eMerchantBroker.com is a low cost payment processor that will partner with you to grow your high risk merchant account and give you access to credit card processing and other hard to get services.

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 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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