What is High Risk Merchant Account and How To Choose High Risk Payment Processor?

Any business accepting credit cards, and looking for the right merchant account holder, understands how hectic it is, and it gets more difficult if you are a high-risk merchant. And it is here where you feel the importance of having a high-risk merchant account.

The article will focus on why business is considered high-risk?  

What is a High-Risk Merchant Account?

 

Any merchant account that faces a high risk of fraud and getting charge-backs by the processor is considered a high-risk merchant account. The account deemed as high risk depends on the assessments based on the business, the owner's credit and business history, and many other factors. 

 

Each processor requires high-risk determination so a business can be considered by one processor but not any other.

 

There is a difference between a High-Risk Merchant Service than a traditional merchant account 

 

Naturally, having your business considered high-risk could be quite daunting. While many business types like gambling, bankruptcy law firms, adult entertainment are designated high-risk accounts. However, businesses showing poor personal credit or high average ticket sales also fall in high-risk merchants.   

 

If any merchant processing company denies your application as it considers you as a high-risk merchant, there is nothing to get panic about. Though you might not get accepted by many of the big names in the industry, you can still get the processor that will be beneficial for you. However, in that case, you will have to pay high processing rates and account fees, and you could generally have to bear the burden of a long-term contract and early termination fee. In many cases, you would also 

have to put a rolling reserve. 

However, you should not despair, many high-risk businesses are running successfully. Though high-risk processors might be shady and exploitative, many honest providers offer quality services. 

 

How to Choose Your High-Risk Payment Processor?

 

If you are found to be a high-risk merchant or is suspected as one, these tips below will help you to find a merchant account that accepts your business and meet your requirements:

 

Find your processor's business type: While your processor might be a specialist in dealing with high-risk merchants, but it doesn't need to serve your high-risk business type. For example, some high-risk merchants or providers might accept cannabis merchants while others do not. 

 

You are offered Load Balancing: With Load balancing, you can also streamline your transactions across different merchant accounts, which you can integrate into a single payment gateway. This has many advantages, for instance, if one of your accounts suppose is dropped, you can still have other accounts. However, with multiple accounts, you can process monthly and the chances of risks are reduced.

 

Read the Contract Carefully: As many high-risk merchant account providers operate with many processors, they do not display the list of their fees or rates online. The fees of each merchant account vary depending on to whom you are matched. Pay close attention to the rates you are charged, and make sure that you understand about extra fees. While you might not likely get approval for interchange-plus-pricing, or monthly contracts, you should ask for the same. 

 

If you are also considered into high-risk business, the objective is to select high-risk credit card processing partners and merchant service, providers. Leap Payments is designated as a reputed company offering high-risk merchant account services. the company streamlines the credit card processing systems, payment processing system, equipment that your business requires each month with no long-term contract. Our team understands your business needs and can easily comprehend your requirement, which will help in reducing the cost and guarantee the best services.