Why Should a Credit Repair Company be Considered High Risk?

Feb 13, 2015

It almost seems like an oxymoron. Credit repair equals a high risk merchant account. How can someone who is trying to help an individual repair his credit be considered a high risk business? It is not that the business owner is high risk. It is more that the individuals he has as clients are considered a high risk. Those entertaining getting into this industry need a high risk credit repair merchant account.

You could say it’s the old adage about a tiger never losing his stripes. Once and tiger, always a tiger. Once a deadbeat, always a deadbeat. This is really cruel saying that just because a person got into financial trouble he will always be in financial trouble. This is the way the card associations see it.

Plus there is another anomaly in the credit repair business. Clients will begin the program with the best of intentions. Then after several service payments have been taken from his checking account he gets buyer’s remorse. He calls his bank and says he never authorized the ACH deductions. Thus, the credit repair company will receive a lot of chargebacks.

If someone asked what is the number one reason a merchant account is considered it would be because of a high number of chargebacks. There are a lot of unscrupulous people out there, unfortunately. The risk of fraud arises when an illicit telemarketer or online merchant obtains a consumer’s checking account information and initiates an ACH debit transfer that may not be authorized by the consumer. In the case of an ACH debit, when a consumer receives a refund for an unauthorized debit, ACH rules permit the consumer’s financial institution to recover the amount of the unauthorized payment by returning the debit item to the originating financial institution. This is where the high risk comes in and every financial institution hates it.

With eMerchantBroker.com, credit repair merchant accounts need to remain under a 3% chargeback threshold. EMB also has insurance and programs which help eliminate some of the chargebacks saving the merchant thousands of dollars each year. There is never an application fee and rates are some of the lowest in the high risk industry.

Let us help you get a high risk merchant account today!

Get Started

Award winning.

  • 2012
  • 2013
  • 2014
  • 2015
  • 2016

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.

Live Chat