Finding a High Risk Credit Card Processor
Are you feeling stuck in a rut because your merchant account was not approved? You aren’t be the first one to have been disapproved for being high risk. Many high-risk businesses have experienced being refused by processing companies. There are some high-risk providers of merchant accounts though that understand the stakes in doing business with high-risk merchants like you, and in fact, have only one goal in mind. They have made it their main purpose to help out such merchants.
In business, the only constant thing is change; it is always unpredictable in some ways. And it is exactly that which makes credit card processors look the other way when high-risk merchants come into view. A select number of providers though are able to carry the weight of risks involved.
For the uninitiated, high risk credit card processing is taken on by credit card processors who embark on the chance of doing business with a company which is seen as being risky. Online businesses need to secure a merchant account with what is called an acquiring bank before they are able to accept credit card payments for their products or services. For a low-risk merchant, there is not much fuss in the application process. With high-risk businesses, however, it is a different matter.
The following are some cons in being labeled as high risk:
1. High exorbitant fees – Credit card processors tend to charge high-risk merchants steep fees from the beginning. They are already anticipating the high rates of chargebacks which can be filed against the business, which is why the rates are much higher than for other businesses. Sadly, when a business cannot cope with the fees, it is possible for them to fail entirely.
2. Outrageous account reserve requirement – A payment processor who chooses to work with high-risk merchants may demand huge account reserves to be used in instances where a chargeback gets applied against a merchant and the latter is unable to pay the bank back from its account. The reserve requirement is not just expensive, but is non-interest-bearing as well. Since this reserve is not available to the merchant until after a set period, a merchant’s cash flow may suffer significantly.
3. Steep chargebacks – Very high chargeback rates are charged to high-risk merchants per event. Plus the banks also charge an administrative cost besides the chargebacks, as a fee for processing the chargebacks.
There are also advantages to doing business with a high risk merchant. The following are some advantages in being labeled so.
1. Global reach – A high-risk business can do more in terms of business dealings than low risk ones; it can even serve clients in counties outside of the U.S., Canada, or Europe. Such businesses can access customers from anywhere in world 24/7. This capability can only add to its attraction to high-risk credit card processors.
2. Limitless earning capability – because it is not limited in the same way as other business types, high-risk businesses can have an earning potential that is boundless. A business classified as high risk can earn considerable income from recurrent payments it processes and receives regularly. Since a high-risk business’ revenues are unlimited or uncapped, the business can grow very fast indeed.
By virtue of the expected chargebacks, the account is viewed as an actively earning business, burgeoning, and not at all in danger of being closed down. It means that the chargebacks are no longer being viewed as something that is detrimental to the business.
It is no wonder that many payment processors have seen the light and are now doing brisk business with high-risk merchants. Such processors work with any high-risk industry, merchants transacting high volumes per day, and many more.
You should not feel low after having been shoved aside by other processors. Talk to the right provider; talk to us.
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