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Do You Need a High-Risk Credit Card Processor? Find Out

by sambit
High-Risk Credit Card

You may find it challenging to find a reputable high-risk payment processor, but you will be amazed at how much easier it will be to run your business if you do. You will improve your reputation and maintain a secure bank account if you partner with a payment processor that understands the high-risk industry.

Fraud is more likely to occur when your sales increase. To stay out of cybercrimes, you’ll want your payment system to come with a superior security solution. This is particularly crucial for high-risk businesses.

In today’s economy, most businesses accept credit cards. If you’re a high-risk business, finding the right merchant account provider can be incredibly challenging. Merchant accounts with high risk come into play here.

Among other things, this article describes what high-risk credit card processing is, why a business may be considered high risk, and how to evaluate companies that cater to high-risk businesses like sharkprocessing.com.

What Is High-Risk Credit Card Processing?

High-risk merchant accounts are payment processing accounts provided by banks to businesses considered high-risk by regular banks. Obtaining a merchant account with an acquiring bank is necessary for businesses to accept credit cards.

Multiple factors can affect the cost of this service, including the type of business, how transactions are carried out, and whether there is a historical loss risk involved.

In addition to higher fees, specialized payment processors are usually required for high-risk ventures. In general, processors avoid “dangerous” merchant accounts because of the perceived risks associated with them.

High-risk merchants pose a threat for various reasons, but the most significant is the potential for chargebacks. Several factors contribute to the risk of chargebacks, including some of the items they sell, their monthly sales, and even the countries they conduct business in. These factors can leave banks and processors at risk of losses in millions.

When merchant accounts are terminated due to excessive chargebacks, they can be considered high-risk. In some cases, they might be considered high-risk simply due to the nature of the industry they operate in.

The Difference Between High-Risk Merchant Services and Traditional Merchant Accounts

The fact that your business was deemed “high risk” is undoubtedly frustrating. Although certain types of businesses (adult entertainment, gambling, bankruptcy law firms, etc.) generally qualify, it can also be obtained simply because their credit rating is poor or their average ticket sale is high. If a processor rejects an application deemed high-risk, applicants should not panic.

You can run a successful business despite the high risk involved – countless successful businesses prove this. Despite several High-Risk Processors’ shady and exploitative behaviours, there are many reputable providers providing quality services.

You can benefit from a high-risk merchant account in four different ways

In addition to the disadvantages that high-risk merchant accounts present, there are some advantages as well:

  • Transactions involving international parties are less restricted.
  • Subscription billing is an option.
  • Chargeback reduction and increased sales volume through load balancing.
  • A more effective fraud prevention system.

By necessity, high-risk processors have extensive experience with risk mitigation measures. Regardless of the cost associated with this, the services provided by high-risk, quality providers will still benefit your business.

What To Look For In A Reputable High-Risk Payment Processor

These tips could help you find a merchant account that may accept your business and meet your needs if you’ve been identified as a high-risk merchant or suspect that you might be one:

●     Choose a processor that will help balance multiple accounts:

Your transactions are spread across multiple merchant accounts integrated into the same payment gateway in a load balancing setup. Multiple advantages can be derived from this. Firstly, you will still have the support of the other accounts if one drops you. Furthermore, having multiple accounts will allow you to process more payments monthly and reduce your chargeback risk.

●     Pay Attention To Your Contract:

As most high-risk merchant account providers are associated with several processors, their fee and rate details are not always listed on their websites, as these can vary significantly based on the merchant account (or accounts) you are paired with. Make sure you understand any additional fees you may be charged to avoid being caught off guard. You can also try asking for monthly contracts or interchange-plus pricing.

Merchants with high-risk accounts and Payment Service Providers

Using a payment service provider (PSP) doesn’t need a dedicated merchant account to accept credit cards. The pricing structure for PSPs is typically straightforward, flat-rate, and there are no monthly fees or long-term commitments. There are several PSPs available, including:

  • Square
  • PayPal
  • Shopify
  • Stripe Payments

Nevertheless, all PSPs are not allowed to service high-risk businesses. Many merchants embellish the truth about their company’s nature to avoid these policies. That’s not a good idea! The processor will shut down your account immediately if you lie about your business. It will also be more difficult for you to get your business approved by business account providers if placed on the MATCH list.

The Final Word

Last but not least, here are some suggestions:

  • Before you sign on, you should do your research. Check with the sales reps of the companies you may be interested in to find out what they offer.
  • A minimum of three companies should be looked into before making a decision.
  • Ensure that you thoroughly review your contract before you sign it.
  • There are times when the provider with the lowest monthly rate might not be the best option overall. Choosing a slightly more expensive provider over the long run may make sense due to intangible factors, like better customer service.

Your business may be considered high-risk for a variety of reasons, as you can see. A safe and reliable payment platform can simplify setting up a high-risk merchant account without causing issues.

The terms of some businesses are more strict since there is more chance of disputes. If you use a secure, high-risk payment processor, you can rest assured that the risks of chargebacks and fraud are minimized.

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