It’s important for a business to be able to process customer transactions; if you aren’t able to take payments, your business won’t last very long. Some merchants are classified as high risk, and this means that they are denied having the privilege of their own account by the majority of merchant providers. When this situation arises, it is important to create a high risk merchant account; when you create one of these accounts, you can continue to take payments.
High risk merchant accounts cater to honest business owners who have been labeled as “risky” by merchant providers. This doesn’t mean the owner is dishonest; it just means that the merchant provider doesn’t feel confident about the business they are in. When you are left with no recourse, you need to bite the bullet and set up a high risk account.
Businesses that depend on a large amount of transactions need to get a high risk account from someone like The High Risk Guys. Typically, your business is considered high risk if one of the following is true:
New Business – Businesses that aren’t registered with regulatory services are automatically considered high risk; when a business is new, the owner might not have time to register. This is especially true for businesses that have had unexpected success; sometimes, the owner just isn’t ready with everything that is needed.
If your business has been blacklisted by merchant agencies in the past, then you are going to have to get a high risk account; merchant agencies aren’t likely to give you a second chance when you have previous bankruptcies or fraud on your account.
High Risk Industry – Merchant providers stay away from certain industries. If you are dealing with downloadable software, gambling or online health shops, then you will need a high risk account. These industries tend to have a lot of chargebacks; therefore, you need a high risk account that will hold customer money for a period of time. After the period is over, they release it to you; this does away with the risk of chargebacks and returns.
Low Volume – If your company doesn’t make many sales, you probably don’t have the resources to investigate fraud; if you can’t afford fraud screening tools, then you need to get a high risk account. Third party processors don’t want to deal with small companies because they fear that they might not be able to pay funds back in the case of fraud.