Why Is My Business High Risk And Do I Need A High Risk Merchant Account?

Aug 29, 2014

Some businesses are high-risk even if you have the perfect credit score; it is more about the nature of your business than the financial situation of the business. If your business is high-risk then you will need to apply directly to a high-risk merchant account supplier who will take you through the process and your application.

Depending on what your business is will depend on its classification as to be more of a risk. Some businesses that are high risk include those businesses that deal with adult-only businesses, this can include dating sites and adult-only content sites, collection agencies and even electronic cigarette businesses are a higher risk.

If your business trades in one of these areas of high risk, then the likelihood of applying for and getting a merchant account supplier who doesn’t take high-risk clients is extremely slim. Therefore, it is important that you understand the requirements of a merchant provider to ensure they are going to consider your business before you waste time on an inappropriate application.

The reason behind the business classification as high-risk depends on a number of different factors. A business that has most of the trade online is susceptible to fraudulent use of the credit or debit card, the cardholder isn’t present in the transaction and this can lead to a number of complaints as well as a high chargeback percentage.

Businesses have a higher risk factor due to the company not getting the money paid or a person defaulting on the payment. These types of businesses are collection agencies or even bailiffs that are reliant on the client not skipping bail in order for the bond repayment to go back into the business.

Therefore, even if you have the perfect credit rating, your business runs the possibility of being high-risk; it just depends on the type of business you own.

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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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