High-risk companies have long been frustrated by their inability to access the same credit card processing services as low-risk businesses.
Finding a credit card processing company that understands and works with high-risk businesses can be challenging.
For high-risk businesses, not having a reliable means to accept credit card payments can mean lost sales and potential customers. They need a high-risk merchant account provider with experience in dealing with them.
This article will dive deep into high-risk credit card processing, choosing a reputable payment processor, and how Von Payments can help you secure credit card processing solutions tailored specifically for a high-risk business.
What is High-Risk Credit Card Processing?
High-risk credit card processing is a type of payment processing that deals specifically with higher-risk businesses.
They may include those in travel, CBD, gaming, adult entertainment, gambling, e-cigarettes and tobacco, multilevel marketing (MLM), and other businesses deemed to have high chargebacks and fraud.
Due to their high-risk category, these types of businesses must often pay more for their credit card processing fees than standard merchants. They may also be subject to longer approval times and additional security checks from traditional payment processors.
What Makes A Business High Risk?
A business may be considered high risk for various reasons:
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- New Merchants – New merchants and startups are often viewed as risky because they lack a track record that would enable the financial institution to assess their potential profitability and sustainability.
- High-Risk Industries – Specific industries are deemed high risk due to a history of high chargeback ratio, fraud, or other issues. They may also be considered high-risk due to their association with polarizing activities such as gambling and adult entertainment. Some high-risk verticals include travel, gaming, e-cigarettes, vape and tobacco, CBD, firearms, nutraceuticals and supplements, subscriptions, and trials.
- Low Credit Score – Bad credit scores or those in need of credit repair indicate a lack of business experience or a weak financial standing. These factors create a perceived likelihood of defaulting on payments.
- High Transaction Volume – Some credit card processors may view high transaction volume as high-risk, as a larger transaction volume may indicate an increased risk of chargebacks or fraud. Businesses with a high volume of payments can also be considered at higher risk because of the sheer number of transactions and costs associated with monitoring them.
- International Payments – Banks and payment processors may be wary of accepting payments from customers outside their jurisdiction due to the added complexities and compliance issues of cross-border payment processing. Processing payments from international customers also makes verifying the customer’s identity and contact information more difficult.
How To Choose A Reputable High-Risk Payment Processor
When selecting a payment processor for your business, it’s essential to consider multiple aspects of the service.
Experience
Choose an experienced platform with a long processing history working with high-risk merchants. Do they have a robust list of high-risk businesses they have supported through the years? Do they have an excellent track record of offering more competitive rates?
Verify the payment processor’s security measures. Do they offer advanced fraud protection tools, encryption technology, and other security features?
Type of support
Find out what kind of customer support you will receive from the processor. What is its customer service record for queries and disputes?
Ask about the reliability and availability of their support services. Do they have live chat, 24/7 phone support, or prompt email communication?
Pricing
Compare fees associated with credit card transactions and other processing costs—high-risk businesses tend to have higher fees. Ensure you’re getting competitive rates for services and solutions.
Research their fee structure and understand how it impacts your profit margins. Do they have a flat fee or interchange plus pricing? Does the platform support multi-currency payments and any other features that could facilitate your operations in the future?
Access to funds
Understand the terms and conditions of when funds will be available. There may be delays for high-risk businesses, so confirm the timeframe for access to your funds in advance.
Reserve requirement
Be sure to confirm the payment processor‘s rolling reserve requirement. Some service providers may require you to maintain a certain amount in your account to protect against chargeback fees or other losses.
Whether the terms of the agreement can change
Enquire whether the terms of the agreement can be changed in the future. This is important, as some payment processors may tighten their restrictions on high-risk businesses over time, and you could be subject to additional fees or reserve requirements.
Find out if they have early termination fees and how much compared to other high-risk payment processors.
How To Get Credit Card Processing for a High-Risk Business
Once you have chosen the ideal payment provider for your company, it’s time to apply for a merchant account.
The application process requires several business-related documents and tax information to determine whether you are a high-risk or low-risk merchant. These documents must be current and accurate for the approval process to be as quick and easy as possible.
The payment processor might ask for more information, such as evidence of insurance coverage, an explanation of any ongoing legal proceedings connected to earlier processing activities, or a thorough list of the company’s owners and their relationships.
A business strategy or financial forecasts could also be required from high-risk companies.
Once everything has been finalized, you will receive confirmation that your account has been set up successfully and is ready for use.
Your payment processor will provide a secure payment gateway to start processing e-commerce payments via credit card or other payment methods such as PayPal, bank transfers, e-wallets, or card-not-present payments.
When applying for credit card processing—mainly if it is for a high-risk business—conduct due diligence during the application stage so that no unnecessary risks are taken by either party involved in the process.
Von Payments Can Offer Payment Processing For Your High-Risk Businesses
Finding merchant accounts and payment processing services can be difficult for businesses seen as “high-risk” due to their industry, products, or services.
Thankfully, Von Payments offers secure and reliable payment processing solutions and high-risk merchant services to ensure your business needs are met and your e-commerce shop is up and running.
If you’re a business owner looking for an experienced provider of payment processing solutions for your high-risk business, Von Payments’ comprehensive suite of services provides secure payment processing, unrivaled customer service, and technical support.
Contact us today, and let’s start building the perfect payment processing solution for your business!