42% of a recent survey respondents state that COVID-19 has posed a threat to their small business in 2021, and this is happening globally. When applying to a merchant service provider, you should be meticulous about who you’re turning to, especially if you’re a high risk merchant. Here’s what you should know about high risk merchant accounts.
High Risk Merchant Accounts
To accept card payments from your customers, you need to open a merchant account from a credit card processor. They’re also known as merchant service providers or payment service providers.
What if you’re a high risk merchant? When applying for a merchant account, you’ll be required to provide some basic information such as business information and tax details. Also, a credit check will be required to calculate business-related factors such as fraud instances, returns, debit/credit card chargebacks, and sales volume.
Your business type will be identified based on a Merchant Category Code or MCC. If you’re tabbed as high risk, this means your business has to do with a greater risk of financial failure.
Specifics of a High Risk Merchant Account
A high risk merchant account means:
- High chargeback or fraud rate, and high average ticket sales.
- The high risk merchant account provider will want to see documentation related to the history of processing, including chargebacks, transaction volume, processing volume, and more.
- Tiered pricing. This means the high riskprocessor can require a transaction fee based on how risky each of your transactions may seem.
- Early termination fee.
- Some processors will maintain a reserve.
- Higher processing fees as compared to low risk accounts.
- Some processors freeze this type of accounts in case the risk has grown with time.
- The safety of funds and the financial health of businesses are critical to any business’ success. So, it’s immensely important to work with a reputable high risk processor that guarantees top-of-the-line security and safety.
Make sure to partner with a true high risk professional that can best cater to high risk businesses byapplying a risk screening process to the unique needs of your business. Choose a processor that provides the latest fraud and chargeback protection features for high risk merchant accounts.
- Offshore and multi-currency payment processing.
- A simple settlement with clients that’s quick and hassle-free.
- The average credit card transaction exceeds $500.
- Theaverage monthly sales volume surpasses $20.000.
- The merchant’s bad credit history doesn’t play a role.
- Recurring or subscription payments.
- High-value item sales.
- Opportunity to sell over $2.4 million in credit card revenue.
What You Need to Know About a High Risk Merchant Account
If you’re a high risk merchant account, you must be trading in products featuring a higher inherent level of risk, such as gambling, adult businesses, pyramid selling, and more. A high risk merchant account comes with its specifics, including benefits that you should be aware of.
Author Bio:Blair Thomas has been a music producer, bouncer, screenwriter and for over a decade has been the proud Co-Founder of eMerchantBroker, the highest-rated high risk merchant accounts processor in the country. He has climbed in the Himalayas, survived a hurricane, and lived on a gold mine in the Yukon. He currently calls Thailand his home with a lifetime collection of his favorite books.