Why High Risk Industries Prefer to Offer ECheck Payments

Jun 26, 2020

One of the best ways to ensure your business maintains an advantage over its competitors is to offer as many payment processing options as possible, including echeck payments. However, this is not always an easy task for some merchants. Those considered high risk struggle to secure payment processing in general; banks and traditional financial institutions are simply too wary of the risks involved in partnering with high risk industries.

So, how does a high risk merchant secure services like eCheck payments? Is it possible to find a reputable, secure provider willing to work with them? Better yet, what is a high risk industry and why do high risk merchants prefer eChecks? The following information should shed some light on everything you need to know to start accepting eChecks and find the right processor for your business.

What is a High Risk Industry?

There are many reasons why a business might be categorized as being high risk. Typically, it is because the company either operates within a high risk industry or there is a risk of financial failure. Startups that have poor or no credit history often fall within this category, and high amounts of chargebacks are another incredibly common reason. Some examples of high risk industries include:

  • CBD
  • E-commerce
  • Adult
  • Pawn Shops
  • Vape
  • Firearms
  • Dating
  • Subscription Boxes
  • Trucking
  • Hotel & Motel
  • Travel
  • Auto Warranties

Why do High Risk Merchants Like Offering eChecks?

According to information from the FDIC, just 7 percent of Americans do not have a bank account – the mass majority does have access. As e-commerce continues to grow rapidly (especially this year due to the COVID-19 crisis and the massive jump in online sales as a direct result), offering as many payment processing options as possible is incredibly important as an e-commerce merchant. EChecks presents a great opportunity to boost sales and give your business a competitive advantage.

Where Can You Find the Best High Risk Merchant Processor?

As a high risk business, it is important to make sure you choose the right provider. Your best option is going to be partnering with an eCheck processor that specializes in working with high risk industries, like EMB. EMB is committed to helping you enjoy quick and efficient payment processing. With EMB, you can start accepting payments immediately and deposit automatically for a streamlined payment process.

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 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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