When it comes to preferred payment methods among Americans, credit and debit cards win hands down. In fact, the results of a recent survey showed that 77 percent of shoppers prefer using debit cards or credit cards over cash.
With so many Americans preferring to pay with plastic these days, it’s essential that your business is able to process credit card orders.
In order to do this, you’ll need to work with a merchant services provider. Depending on the type of business you run, you might want to work specifically with a high-risk provider.
Read on to learn more about high-risk merchant accounts and how they can benefit your business.
What Is a High-Risk Merchant Account?
First things first, let’s clarify what a merchant account is. A merchant account is just an account — that a bank or other financial institution approves — that allows a business to accept credit and debit card payments.
As the name suggests, a high-risk merchant account is a merchant account designed for businesses that financial institutions have deemed “high-risk.”
What Makes a Business High-Risk?
Some factors that could make your business a high-risk business include:
- Having a high monthly sales volume
- Having lots of high credit card transactions
- Accepting multiple currencies
- Offering recurring subscription payments
- Being in an industry that is known to have high-chargebacks
- Being in an industry with a “reputational risk”
The following are some businesses that are likely to be considered high-risk:
- Businesses that sell adult products
- Bail bonds
- Businesses that sell electronics online
- Debt service companies
- Home-based businesses
- Firearm dealers
- Mail order or telephone order businesses
- Multi-level marketing (MLM) businesses
- Online dating websites
- Telemarketing and telecommunications companies
- Travel services
If your business falls into one of these categories, a high-risk merchant account is a good option for you.
Benefits of High-Risk Merchant Accounts
If you’re considered a high-risk business, you might have a harder time finding merchant services providers who are willing to work with you. They might also charge you higher fees and give you fewer service options.
That’s why it benefits you to work with a provider who specializes in high-risk clients.
Here are some specific benefits that come with signing up for a high-risk merchant account:
Lower Account Termination Risk
When you’re a high-risk business, you might have to jump through a few extra hoops to find a merchant services provider that will work with you. When you do find the right provider, though, your risk of account termination decreases dramatically.
For low-risk merchants, lots of chargebacks can lead to account termination.
With high-risk merchants, the provider is already aware of the risk and the has measures in place to prevent fraud. As a result, you’re less likely to have your account terminated, even if a chargeback happens or fraudulent card gets used.
In every business, customer security ought to be a top priority. This is especially true when you’re working in a high-risk industry where customers are spending a lot of money.
With a high-risk merchant account, there are lots of techniques in place to protect your business from fraud and protect your customers from data breaches.
High-risk merchant services providers take extra measures to make sure credit cards are legitimate, meaning you’ll have fewer security issues on your hands.
Access Larger Markets
Once you start working with a high-risk merchant, you can expand your business and advertise to a larger market. You’ll be able to accept payments online and over the phone.
With more expansion opportunities, you can also reach a larger customer base and increase your sales and revenue much more quickly than if you were working only with a local market.
How to Choose a High-Risk Merchant Account
Okay, you’re convinced that a high-risk merchant account is a good option for your business. How do you make sure you choose the right one, though?
There are a lot of predatory businesses out there looking to take advantage of high-risk merchants who can’t get approved for traditional merchant accounts. How do you avoid getting scammed by one of them?
Here are some guidelines that will help you choose the right high-risk merchant services provider for your business:
- Make sure they have experience working with businesses like yours
- Analyze their fees and make sure there are no hidden charges
- Make sure they accept multiple payment types
- Look into their security practices
- Make sure they have adequate customer support (ideally, they will have 24-7 live customer service)
- Work with a merchant services provider that has been around for a while and has a history of good service
It’s a good idea to pay attention to online reviews and find out what people are saying about a particular merchant services provider. You might also want to ask the provider for references or testimonials.
How to Get Approved for a High-Risk Merchant Account
Once you’ve found the right high-risk merchant account for your business, you need to make sure they’ll agree to work with you.
There are lots of things you can do to increase your chances of getting approved, including the following:
- Make sure you have a high credit rating
- Be honest about issues you’ve had with past merchant accounts
- Be willing to pay slightly higher fees or accommodate other requirements put in place for high-risk businesses
- Make sure your business information and contact information is consistent across multiple platforms
If you keep these tips in mind, you’ll find that it’s a lot easier to get approved for a high-risk merchant account.
Get a High-Risk Merchant Account Today
As you can see, there are lots of reasons to consider high-risk merchant accounts.
And, now that you know what to look for when choosing one, you can make sure you pick the best option for your business.
If you’re in the market for a secure, affordable high-risk merchant account, consider working with us at High Risk Solutions. We make online credit card processing easy with cutting-edge technology and reliable and versatile services.
Sign up for an account today or contact us to learn more about our services. We can’t wait to work with you!