Do you have a business that sells products online, or your business falls under a high-risk SIC code? If so, it is important to understand the benefits of a high-risk merchant account. These accounts are designed for high-risk businesses with lower credit ratings and higher-risk transactions. The good news is that there are many great merchant banks these days, such as guaranteed approval and a quick application process.
A look at High-Risk Merchant Accounts
These high-risk merchants could earn this classification by their average transaction size, industry type, common chargeback and are structured to accept subscription-style payments. By fell into one of these categories, your trade will be automatically considered high risk by merchant account providers throughout the country, in order. Some industries do indeed fall into this category as high risk, while others fall within a strict checklist as to the potential risk factors. Let me highlight a few common market types which all have attained high-risk credit card companies: subscription-based - payment-based payment systems that are designed to meet the high-risk credit card.
What is a High Risk Merchant's account, and how it works?
To access high-risk merchant account, the bank has to find their buyer bank. This makes it much better to request assistance from a reliable payment service company when getting the account. What is a high-risk merchant account? How do I do that?
Types of Businesses Considered High Risk
Merchant account providers are warier of customers without having much experience in payment processes. Do you have a bad credit history? You're not very good at managing your finances or more likely to commit fraud. If the average cost was excessively high the average rate would be considered high risk. If you've been doing business overseas with american customers based in a foreign location, this makes your company more susceptible to fraud. Some examples of high-risk industries are airlines escort services casinos e-cigarette vendors collection agencies fantasy sports websites guns vendors life coaches, pawnshops, and vacation planning sites.
Why do banks and credit card processors consider my business to be high risk?
“High Risk” is a category name and it is important to note there are many terrific companies that could receive this designation from a credit card company. While it is possible to understand some unique factor factors and how the business views each business, the overall importance is based around three main key '' factors.
The Ups and Downs High-Risk Merchant Account
Right after initiating business and making necessary arrangements and completing adequate paperwork, a refusal from the merchant bank for that of a merchant account may be very disheartening. This kind of business will then fall under the high-risk category and you will not be able to accept online payments via cards.
In this regard, you may also be optimistic about being a high-risk merchant. To be eligible to obtain credit card processing, a business holder has to have a merchant account in the receiving bank. To acquire this account, the business owner has to provide a financial history as well as the product types and services. The bank determines whether the merchant account will be issued. In case of a high-risk merchant, the traditional bank denies it. The high inclination to chargeback is the primary factor behind a high-risk merchant.
The reasons:
- Product or service type
- Average sales amount in dollars
- Sales internationally
- Variation in sales monthly
- Processes of customer service
Despite being in
- high-risk merchant accounts, the merchants can profit!
The Benefits are as Follows:
Acquiring Capability of Global Expansion
Being at high risk, these merchants are not obligated to follow the limiting rules of traditional accounts. These accounts limit the transactions to the parent country only. They may not allow the merchants to carry out the card-not-present transaction process and also may restrict the methods of payments or may also confine the International payments. On the contrary, the high-risk merchants can transact according to their will, irrespective of the currencies. This way they can globalize their business.
The Absence of Volume Caps
This is very common in traditional merchant accounts. As businesses are unpredictable, they cannot ensure a stable income every month. On the contrary, the banks relate the account with stable finances, which do not happen with everybody. The high-risk merchants can transact freely as they do not have to worry about the target volume per month. The subscription and recurring merchants are highly benefitted from these high-risk accounts.
Chargeback is Minimized
If the chargeback ratio of 1% is breached, a lower-risk merchant’s account may get terminated. As there is a high chargeback for the high-risk merchant account, they are safe. These merchant accounts are generally not terminated due to high chargeback.
Hence for a high-risk merchant, it is largely beneficial to work with a payment processor of high risk as that may yield success for a longer period.
How can I get my Brand New Business Idea Approved?
Merchant Find USA has been helping many new entrepreneurs start into the Payment Processing industry. Occasionally new ventures without undergoing the process of their history face insanity barriers on their route to approval. Merchant Find USA payment partners approvers any company and business for a merchant account with a pay processor.
There's no Need to Stress
For bad credit we submit them through our banks which will not turn you back based on just your scores right away. It helps to focus on getting your business flowing instead of stressing about three basic numerical codes. We have integrated our banking networks with financial solutions like Merchant Services Fraud & Chargeback management tools to mitigate these vulnerabilities. So that he can help predict a potential problem before it becomes an issue and reduce it. We treat many deterrents from business and credit scores to high chargebacks that place your business in the high-risk processing category.
Conclusion
If you have a business that sells products online or your business falls under a high-risk SIC code, it is important to understand the benefits of a high-risk merchant account. These accounts are designed for high-risk businesses with lower credit ratings and more risky transactions. The good news is that there are many great features these days such as guaranteed approval and a quick application process. Learn more about the benefits of a high-risk merchant account by reading this blog post! Click Here to Apply for a merchant account!