High Risk Credit Card Processor
Payment Gateway Setup for High Risk Merchant Accounts
A merchant account is easy to come by for a low risk business compared to a high-risk business. How does one classify a high-risk business from a low risk business? This classification is based on the provider’s risk (underwriting) department’s guidelines. If the underwriting guidelines are stringent and your business model falls into the high-risk category, then you may not get approved or you may be quoted higher rates and a not-so-friendly terms and conditions.
We understand that it may be harder and difficult to find a good quality credit card processor and open a merchant account for such high-risk merchants. This seems to limit the options for these businesses. However, when you shop around for a quality merchant account provider and a credit card processor, you may be surprised to know that there are quite a few online merchants who specialize in catering to high risk merchants.
With a lot of changes happening in the commerce/ business practices and banking regulations, it therefore becomes imperative to find the right merchant account provider for your business, one whose terms and conditions are clear and comes with no hidden costs. This is important for a business which is vulnerable to chargebacks, fund holds, higher rates and fees.
Opening a new Merchant Account: If you are a business that is classified as high-risk, it is challenging to open a merchant account but not impossible. Merchant account providers such as banks and independent financial organizations look for these qualities to approve an account:
- A positive credit rating helps open doorways.
- If you’re a start-up and high-risk, make provisions to pay a high fees/ rates to ensure that your special account requirements are taken care of.
It is important to do research and find a credit card processor that suits your requirements in terms of the transaction fees charged, the minimum and rolling reserve requirements, discount rates, the per month minimum charges, the chargeback fees etc., When you start and run a business, there are inherent risks and this need not be a deterrent in processing credit cards. It is also beneficial to look for a merchant account provider that charges zero application fees, no setup charges, and helps out with a payment gateway setup where you can provide your customers with different payment options such as ‘all major credit cards accepted (MasterCard, Visa, Amex etc.,) and also online bank transfers, mobile payment etc., This gives your customers more flexibility. You need a provider who supports flexibility in payment options and helps your way in generating greater revenues for your business. It is important that you understand the rates and fee structure fully when you are going for a high-risk merchant account and not a conservative one. It is important to research on all the potential processors who deal with your business type and make an informed decision.
Businesses Types Classified under High Risk Merchant Accounts
Some businesses that usually come under the purview of being classified as high-risk are:
- Smoke/ tobacco shops, glass pipe and head shops, online alcohol shops and basically any business which must follow age restrictions.
- SEO service providers, internet marketing and advertising companies
- Dating and escort services
- Credit Restoration Services/Repair Credit Company
- Debt Settlement Companies, Collection Agencies
- Computer Repair / IT Tech Support Services, Virus Removal
- Online gambling and entertainment providers
- Sexually oriented businesses etc.,
- Vitamin Supplements and General Medicines sold as MOTO
- Currency Dealers, Gold Coins, Silver Coin Sellers
- Check cashing services and money transmitting businesses
- Online tour operators, travel agents, vacation planners etc.,
- Timeshare Relief Companies, Litigation, Deed Transfer etc.,
It is important to find someone who can minimize the cost of payment processing, someone who approves the different verticals of your business type. The application processing must be simple and concise. There are payment processors who provide merchant accounts for your newly established start-up and not just the established players with a good credit rating, Though, a good credit rating is a must, there are merchant account providers who support even when you’ve been denied or shut-off by other conservative banks and face higher chargebacks.
If you’ve been denied or shut-off by other credit card processors like PayPal, Square or Stripe and have faced bankruptcy before, or if your merchant account with a previous bank or processor was terminated, you may find it difficult to open a new account. Although, it is possible, it may come with more stringent terms and steeper rates. Assistance is provided in opening both offshore and domestic accounts. But the rates for the offshore accounts are almost always higher and the fee structure more stringent because of the inherent chargeback risks and lack of transparency. To conclude, it must be said that banks or payment processors look for people who understand the business environment, and are able to identify the potential risks in managing credit card acceptance. It is important to maintain a good credit report and transparency in your dealings. When it comes to the businessman, look for a provider who sets terms and conditions that are conducive to the growth of your business and gives you flexibility to improve your prospects.
Merchant Processing supports all major credit cards:
- American Express
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