There are many reasons that businesses are classified as “high risk”. If your business is, it is not the end of and you can still find merchant accounts.
The type of business you operate may be why it is considered “high risk”. This does not necessarily mean it is a bad, immoral business, it just means that it is more likely to fold under than other types of businesses. These include lotteries, car rentals, escort services, firearm sales and repairs, online dating, pawn shops, infomercials, hair restoration services, meat lockers, collection services, and adult/pornographic studios and webpages. These businesses not only have a high risk of failure, but also of legal issues, which aids in putting them into the “high risk” category.
Being a new business owner can also leave your business classified as “high risk”. It is similar to those without credit who are looking for a credit card; most of the time interest is high. This is because the person does not have any clout, or reputation to the industry. While having no business record is not good, it is still better than having a bad business record. It is possible to find a merchant account with no business record.
Likewise, having a bad credit score can harm a business. Those who have lower credit scores are viewed to be more likely to make bad business choices (though, anyone can make a bad business decision, regardless of credit score), therefore are considered “high risk”. It can be tricky to get a merchant account, but as in the case of having no business history, it can be done.
If your company processes a lot of international orders it can also be flagged as being “high risk”. International orders can be hard to regulate, therefore many merchant service companies do not want to deal with them. The same can happen if the majority of your business online. It is hard to regulate and keep track of where the product is actually going, and whom it is going to. Although this can be a hurdle, it is still possible to find a merchant account.
While being flagged as “high risk” is a legitimate concern, it does not have to be the end of your company. By finding the right merchant service, you reputation can be heightened, and your business should thrive.
Does your high risk business need a merchant account?