Opening a Merchant Account as a High-Risk Business?by Confidential Banking #1 Merchant Processing Services
Do you run a cash-only business? You may be losing a ton of money by not accepting credit cards as a mode of payment.
When you only accept cash, you are limiting what your customer can spend – they can only spend the cash they have on them. In a society where we are practically going cashless, most people do not carry a lot of cash on them. So, a customer that would have otherwise spent $100 at your business can now only spend $50… because that is all the cash they have on them. While some business owners might say, “Well, my customers will just go to an ATM to get cash, then they will come back and spend the money,” you better hope you have some extremely loyal customers to bank on that theory.
Offering your customers the option to pay via a credit card is crucial for your business – all the more so if you own an e-commerce store, where card payment is the only option customers have. If you are ready to add the option of credit card payment at your online business, you can use any third-party agency that offers merchant processing services, including credit card processing.
But there is a catch!
Every bank and credit card issuer is willing to support low-risk businesses. However, companies that are “high risk” do not get as much support when opening a merchant account (which is crucial to enable credit card transactions.) These high-risk companies may need to use services offered by specialized high-risk merchant service providers to accept credit card payments.
Are you a high-risk merchant, though?
High-risk businesses are those that belong to industries that involve unusually high value and volumes of sales with thin margins and are likely to have high chargeback rates. These are a few of the industries that often need high-risk merchant accounts: adult entertainment, cryptocurrency, gambling or casino, foreign exchange trading, tech support, multi-level marketing (pyramid selling), airline tickets, travel agencies, online dating, penny auctions, cash advances, pharmaceuticals, Nutraceuticals, drug paraphernalia and social gaming.
If you run a business that has been flagged as high risk, you will find it difficult to get a merchant account as most banks and credit card issuers are more cautious about high-risk businesses than they have been in the past. Hence, you need the assistance of merchant service providers who primarily cater to the needs of these types of businesses.
How to choose a high-risk merchant services provider?
Ask around and choose a merchant service provider with a well-established reputation in the field and someone who is well spoken of for the range and quality of services offered. Choose someone who caters to your specific needs. For instance, depending on the nature of your business, you may require 24-7 support. Insist on a breakdown of the fees and do not sign up unless you are convinced about the fee structure.
Getting set up with payment processing in a high-risk industry can be a challenge. However, it is easier with the right high-risk credit card processing partner in your corner.
Created on Mar 6th 2020 01:59. Viewed 364 times.