01. You’re Categorized as a High-Risk Merchant
If it comes to payment processing, you might have difficulty getting approved for a merchant account since you run in a high-risk industry or fall under one of any number of explanations why a merchant account provider would classify your company as high risk, such as: fraud, bad credit, or background of chargebacks.
The following are a couple of the many industries and businesses that have higher incidences of chargebacks and that many merchant providers would deem as needing a high risk merchant account.
- Automotive brokers
- Cannabis dispensaries
- Lending collection
- Fantasy sports sites
- International import/export
- Real estate
- Traveling agencies
- Any weapons associated business
In other words, if your business model is considered to require a high risk merchant account, finding a financial institution that is willing to deal with you is tough. Therefore, you’ll need a company that specifically deals in high risk merchant account services, and who will set you up for success.
02. Excessive Chargebacks
There are several advantages to signing up with a high risk merchant account service provider, and the largest one includes monitoring chargebacks.
Most of the time, the retailer is charged a fee for every chargeback, which covers the service administrative costs. However, a high risk payment processor is going to have considerably greater fees for every individual instance.
Additionally, if the retailer is currently in a high risk industry and is getting excessive chargebacks, the prices go up much more.
With that said, a high risk merchant accounts provider is actually very rarely terminated because of excessive chargebacks. Although the merchant might pay higher fees, the longevity and competitiveness of the actual company itself is set up for success.
03. You Want to Earn More
With a high risk merchant account provider backing your payment processing, you may potentially uncover a sustainable source of long-term growth to your company.
In reality, some merchants regularly rely on normal recurring payments or large-sum transactions to provide a steady stream of earnings that propels their company forward. Having a high risk merchant account provider, you can continue to use this company model without much difficulty.
04. You Want to Become More Secure
The definition of “insecure” companies means that they must be careful with their payment processing. High risk merchant account services will regularly employ reliable detection methods during the trade process to learn whether the card, along with the trade in general, is valid. These secure techniques help protect the organization, the merchant provider, and the card’s original owner from fraud or theft.
05. You Are Looking to Expand
You can take advantage of high risk payment processors if you’re looking to expand, as normal low-risk processors impose limitations (both in spending and in money ) on card trades that can impede growth.
The earning potential of more sales alone can make insecure merchant accounts seem attractive; add in the prospects of selling to more places – and in multiple currencies – and suddenly the earnings opportunities become infinite.
Ensure you ask the right questions when shopping for a high risk merchant account payment provider to ensure you’re partnering with the ideal provider for your specific business model.