Summary: Being labeled as “high-risk” comes with its caveats. However, there are opportunities where you can get out of this situation with minimal consequences.
When you initially hear that your business is considered “high risk” and you’re unable to get the perks of a credit card swipe machine, it may make you feel like someone who’s credit’s hovering around the 500’s. It’s almost like you did something wrong and credit card merchant accounts are now alienating you. While this all sounds rather negative, there are ways to create a positive and affordable merchant account experience, so you can increase the number of opportunities for more customers in the future.
Some of the Major High-Risk Factors
Businesses that are identified as high risk doesn’t just depend on chargebacks but the products and services that they sell. For instance, merchant account providers aren’t trusting when it comes to things like online pharmaceuticals, Bitcoins or Forex trading, timeshares, online gaming, adult products or services, subscription-based services, and other products or services that are not legal in certain states.
Additionally, there are other factors aside from services such as a high chargeback ratio, dealing in multiple currencies, bad credit, little to no credit card processing history, and previously being listed as a terminated merchant. With the high volume of credit card processing out there, most merchant account providers don’t want to deal with high-risk businesses associated with the aforementioned segments mentioned above.
Strategies for High-Risk Accounts
There are numerous strategies and routes that you can take to secure credit card processing from merchant account providers like Charge.com for your high-risk business. If you have a significant amount of capital resources, it goes a long way with banks, as they’ll be more willing to provide you access to payment processing services. As you probably already know, concerns about financial issues are why these providers second-guess whether or not they want to do business with high-risk accounts.
But, not every small business has the capital to suffice, right? So what happens then? Since a bank may not approve your business for an account, you can turn to a credit card processing company that help high-risk accounts gain access to credit card processing. Note that fees may be higher than normal so be aware of this prior to signing your contract. With the drastic increase of high-risk merchant payment processors now available for small businesses, you can take the appropriate time to select the one that meets your needs. Be sure that you closely consider which provider you’re going to opt with as certain companies will overcharge and bombard you with a plethora of fees that could potentially make the process useless in the long run.