The Best Time to Seek Out a High Risk Merchant Account
May 16, 2023
In the complex world of payment processing, getting approved for a merchant account can be tricky. Especially businesses considered high risk. Many companies start off with regular payment processing and later find out what a high risk merchant account is.
One way to figure out if you’re merchant account is in jeopardy is by knowing your industry. Some of the most common high risk industries include online dating, the adult entertainment industry, medical marijuana stores, CBD oil, online gaming communities, automobile dealerships, and vape companies.
What Merchant Account Works For You?
If you use an aggregate payment processor like PayPal, Square, or Stripe, and are in one of the abovementioned industries, you’ll need to look for new options. At first, you may have difficulty finding a company to provide you with the payment processing services that you need. Nonetheless, start looking early before you put your processing at risk. If your account freezes you can lose money and won’t be able to process orders.
Addtionally, if traditional declined your application in the past, it might be time for you to seek out a high risk merchant account.
High Risk Merchant Account Indicators
1. When you’re in a high risk industry
This may be the easiest way to understand whether it is time. Why? If you’re a high risk retailer, banks recognize you’re line of work outright. They already have a detailed system for taking on your account, or limiting your processing.
With that said, starting a business within a high risk industry is not difficult. These industries have regulatory concerns, not prohibitive issues that many have presumed.
Determining Your Level Of Risk
Essentially, different payment processing companies have different ways of determining the degrees of risk. Industries that need a custom merchant account, are prone to fraud or chargebacks, and also those that have profit margins that are lower are frequently the ones that qualify for a high risk merchant account.
For all these reasons, seeking out sustainable payment processing resources ensures the financial success of your online processing.
2. PayPal, Stripe, Square dropped your account
If you are a high risk business, conventional payment processing companies will be a whole lot more difficult to strike a deal with. Sometimes the reputation of an industry can have these other banks and aggregate payment processors closing their doors to you. Applying for a high risk merchant account with a payment processor who specializes in working with high risk businesses is the ideal option.
Payment Processing Providers
High risk merchant account payment processing providers know what you are going through and understand how to best help your company reach its goals. Reputable companies like PayKings have experience in this arena. You won’t find any jumping to conclusions or trialing standard services. They will work with your specific business type to create a solution that is unique to your needs, one that is secure, and beneficial for everybody involved.
Working with a custom merchant account payment processing provider is your best option. When you find that you can’t strike a deal with traditional banks and aggregate companies, it will become very clear that a high risk merchant account is the route you need to take.
3. High chargeback rates.
Chargebacks can result in your company being categorized as high risk, so in the event that you experience a hefty number of these, a high risk merchant account payment processing provider is absolutely the right choice for your company (and often, your only option).
When a credit card is stolen, for instance, the credit card provider of the customer will begin to investigate the transaction for any suspicious activity. This contributes to a chargeback that provides the client with the amount of money spent to be refunded for the fraudulent purchase. However, this money comes out of the company’s earnings, even though service or the product was provided.
How To Decrease Chargebacks
If chargebacks occur often, traditional providers will avoid working with you. You’ll want to find chargeback protection.
There are a number of reputable companies that can remediate chargebacks. They also have tools that will help decrease them in the future.
Know what to look for and which questions to ask. After that, your search for the best possible high risk merchant accounts will be a breeze. Our experienced team at PayKings has a wealth of experience helping merchants. We’re here to help you understand your options.
Contact us today with questions regarding any of the topics discussed in this post or to set up a high risk merchant account.
May 16, 2023 | High Risk Merchant Account | Dustin