If you are a merchant high risk
accounts or payment processors might sound familiar. They are the new-age
revolutionary payment processors for businesses that run a high risk. With the
advent of online payments and their eventual domination of the sector, it's
high time every business owner knows about them. For those of you who are still
new to the high-risk business game or are just thinking of starting a new
business, this article checks who the high-risk merchants are!
What Is A High-Risk Merchant Account?
Before understanding
the concept of a high-risk merchant account, we must understand what a
payment gateway is. A payment gateway is a mechanism or a network connecting
your account to the platform you are trying to transact. It is an unbiased
third party that maintains the security of transactions during the transfer
from a buyer's account to the merchant's portal. Hence, it is fundamental for a
transaction to occur. It is an advantage that buyers can use several payment
methods on these gateways according to their needs.
The primary benefit is
that these gateways offer an extra layer of safety through data encryption,
minimizing the risks of data theft or scams. It also acts as a protective cover
for the merchant as it can save them from insufficient funds in the buyer's
account or expired cards/cards exceeding their credit limits. Hence, you can
understand that these gateways make up for the lack of a physical card-swiping
mechanism and provide safety on their behalf. But how do we use these gateways?
Exactly! Through high-risk merchant accounts!
High-risk merchant
accounts are specially crafted accounts that can deal with high-risk payments
and offer other unique features you can't get from regular savings accounts.
For instance, traditional savings accounts cannot deal with chargebacks and
similar risks that high-risk transactions possess. It is because they are not
for such transactions, and their repertoire consists of different usage cases.
For example, a chargeback occurs when your consumer cancels a pending order,
which may be a loss for your business.
Who Are High-Risk Merchants?
Now that you
understand a high-risk merchant account, let us check who qualifies as a
high-risk merchant and who needs these accounts.
Firstly, merchants who
deal with high transaction volumes or high average transaction rates may
qualify as high-risk merchants. For example, if you are a merchant processing
over $20,000 in monthly payments, or your average transactions are worth $500
or more, you may qualify as a high-risk merchant. Merchants selling
internationally and having a global client portfolio may be eligible as
high-risk merchants. Primarily if you cater to countries listed with a high
risk of fraud (excluding the U.S., European Countries, Japan, Canada,
Australia, etc.), your business may qualify as high-risk.
Additionally, newer
merchants with a short history of processed payments or no history may qualify
as high-risk merchants. It is because they lack a track record as proof of
security. Merchants with low credit scores are also deemed high-risk.
Another major factor
determining whether a merchant is in a high-risk business or not is the
industry to which they belong. Even with spotless records or lower transaction
volumes, sometimes a merchant can be classified as high-risk due to their field
of business. It is because they work in an industry with a high risk of fraud,
legal issues, returns, or chargebacks. For instance, subscription-based
services or businesses may be high-risk as several people sign up for free
trials but then must remember to cancel the payment. Hence, upon checking their
statements, they often charge the fee back. Let us look at some of these
"high-risk" industries:
- Alcohol
- Adult products/services
- Auctions
- CBD (Cannabidiol)
- Delta 8/9/10
- Vapes and e-cigarettes
- Pawnshops
- SEO (Search Engine Optimization) services
- Firearms
- Forex
- Debt Collection/ Consolation
- MLM
- Sports Betting
- Subscription/Trial Offers
- Travel
- Supplements and many more!
Where To Get High-Risk Merchant Accounts?
If you feel intrigued by
the proposition of high-risk merchant accounts and are thinking of getting one
for yourself, the next question is, how do you do so? It is pretty simple. Many
of the well-established banks around the world offer high-risk merchant
accounts. Make sure to check the accreditations of the payment processor you
choose. With suitable payment processors, you can opt for overseas transactions
(off-shore high-risk transactions). Just make sure to check all the features of
the account providers and how competent they are
in dealing with rollback charges. Here are three formidable choices from our
side:
Shark Processing
Shark Processing is a
unique high-risk payment provider offering merchant accounts for United
States-based and International merchants. They have several payment processing
solutions like high-risk credit cards and ACH processing. Depending on your
industry, you can choose from their wide range of services. They have unique
relationships with multiple banks and can help you start your business. With
Shark Processing, you can handle the million denied forms from several banks.
Make sure you have a
legal business, leaving the rest to the sharks! Shark Processing offers
excellent rates and has simple and quick processes behind the scenes for a
hassle-free experience. They accept most high-risk industries, have the best
connections, and have exceptional support teams.
Stax Payments
Trusted by over 30000
customers in the U.S. alone, Stax boasts impressive records and receives
excellent feedback regularly. With their transparent pricing policies and
helpful schemes, you can save much of your hard-earned money, earning them a
spot in our top 3 choices.
Chase For Business
Chase, by JP Morgan,
is among the biggest names in the industry and has built upon years of
experience and excellence in the field and hardly requires any introduction.
Conclusion
The digital revolution
is responsible for several new changes around the globe, and online
transactions are indeed a part of it. As a result, the previous standard,
physical transaction, is slowly becoming a story of the past. However, like
with any new revolutionary thing, online payments also have their share of
cons. They already have the upper hand and provide the option of tracking every
transaction seamlessly. Still, it is worth remembering that it brings many
benefits as well. In any transaction, a risk is involved - whether online,
physical, high or low risk, etc. Hence, with a bit of care and emphasis on
security, we can perfect online transactions down the years.
Due to ease and accessibility, new customers are switching to online transactions every day, showcasing the vast potential. Banks are already investing massive amounts of money in perfecting these services, and the future seems bright for high-risk merchants and their accounts alike. However, keeping security in mind, we can make these transactions even safer with a few more changes.
