There are 7.8 billion people in the world today and 2.05 billion of those are online shoppers. This means that more consumers are also leaning towards digital transactions in paying for goods and services, especially these days when most physical stores are closed due to the pandemic and people choose to order everything from food to electronics online.
Now if you’re a business, you know that having a payment gateway is essential for you to accept online purchases.
But if you’re one of those industries classified as a high-risk merchant, you’re probably dreading the long process of applying for a high-risk merchant account that will allow you to process payments online.
To help you get started, here are some of the simplest yet useful advice to help you learn more about high-risk merchant accounts:
You need to know why you’re a high-risk merchant.
There is no exact criteria for classifying a business as high-risk, but there are a few factors that most merchant providers look into when determining if you should be given a high-risk merchant account.
The biggest reason for classifying your business as high-risk is that you’re more prone to chargeback or fraud rates due to the nature of your business. For instance, if your industry is often associated with a history of scams, you could be tagged as high-risk due to the principle of guilt by association.
Underwriters also look at your personal credit when determining your high-risk status. If you have a low personal credit rating, your business is more likely to be tagged as high-risk even if it’s doing well. You need to determine why you’re a high-risk merchant so you know exactly how to go about the process of applying for and using a high-risk merchant account.
You need to find a merchant provider that specializes in high-risk merchant accounts.
When you start considering a payment gateway for your business, you’ll find that the best merchant service providers usually have the lowest interest rates.
But if you’re a high-risk merchant, you’ll be disappointed that these companies don’t offer high-risk merchant accounts, which is why they can afford to have such low rates.
There are a lot of companies, however, that could offer you a high-risk merchant account that’s tailored to your business but won’t break your bank. These merchant providers know exactly why you’re high-risk and will be able to offer you the best service possible.
The bottom line
The simplest advice that you can get for getting a high-risk merchant account is to be wise enough to know your options before getting into a contract.
In fact, it’s best to test the waters first by signing up for a month-to-month contract so you still have the option to move to another provider if you have a hard time with one company.
Being high-risk doesn’t mean that you have to be desperate about getting a high-risk merchant account. You still need to find the most cost-effective balance between good services and costs.
