High Risk Merchant Account

Entrepreneurs enter into the market with new business ideas.  When everything is established and they go to the payment gateways/ Banks to get the payment gateway, they don’t get the approvals from the risk departments considering the business to be high risk business.High risk businesses are often declined by the payment processors and acquiring banks and it became difficult to get the fair payment processing account.

All kinds of financial institutions process money. And when it comes to processing money – they are obligated by regulators to classify merchants as low risk, medium risk and high risk merchants. Payment processor will never accept you when they think you process high risk and there are chances that they will lose money. And even if they accept you they will charge very high transaction discount rate. There are few reasons why your business can be considered as a high risk business. Few reasons are:

• You have lost your previous merchant account due to high chargeback ratio.
• Questionable sales and marketing tactics
• Potential legal and financial liability
• Your credit is really bad.
• Industry known for excessive chargebacks or fraud incidents
• Trial continuity business
• Previous credit card processing is not good enough
• You’ve been branded as terminated merchant (TMF).

OBTAINING HIGH RISK MERCHANT ACCOUNT

If you are not getting the merchant account, don’t worry. There are providers who are specialized in providing gateways to the high risk account. It may be a little more expansive, you may need to agree to a high rolling reserve or you may need to send more documents during the onboarding process but you’ll be able to get the payment gateway. First of all you need to find who is able to cooperate with you. We at Merchant Stronghold love to cooperate with merchants that has high risk business category.

Dos and Don’ts:

1. Read your contract carefully: Most processors will make you sign the merchant processing agreement. Read the entire contract carefully. Pay attention to fee, terminations, restrictions and all other things.
2. Selecting the payment processor: If you are a high risk merchant, it does not mean that you need to settle for less. Choose the PSP carefully who is ready to negotiate with you.
3. Ensure that all the online transactions are protected by encrypted server transactions. Generally payment processors are backed by large security and technology companies to ensure all their accounts are safe and transactions are secure. That’s a good sign.
4. Your processor should offer online viewing and reports, rather than traditionally mailed transaction reports. That way, you can keep track of your transactions and reports.

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