Many merchants are aware that traditional funding is simply not an option for them because of their business type or industry. For other merchants, the notification that their merchant account is going to be closed and credit card processing service terminated is a complete surprise. They are left to scramble to find viable payment solutions.
Is your business considered high-risk in the eyes of traditional processors? If so, you might be feeling like your options are increasingly shrinking – and you are probably right. While being deemed high-risk can make it difficult to secure the funding and processing you need, it is not impossible. The key is to understand what it means to be high-risk and then find an alternative processor willing to work with you.
Why are some merchants considered “high-risk”?
There are certain industries and business types that have a reputation for being risky (e.g. travel and tourism, online firearm shops, nutraceuticals, online gaming, credit repair businesses, etc.). For example, consider credit repair companies. There are two primary reasons why credit repair businesses are deemed high-risk by acquiring banks. These merchants are known for struggling with a high rate of chargebacks and exceeding volume caps.
- Chargebacks – Some industries and business types experience higher chargeback rates than others. Too many chargebacks not only cut into a business’ bottom line, but also chip away at its reputation among credit card processors. If chargebacks spiral out of control, most processors will shy away from you.
- High Volume – Companies that experience regular sales surges, massive monthly sales or high average ticket amounts can find themselves dealing with account freezes, fund holds and data security liabilities. This is just one of the many reasons why it is critical to choose the right merchant account provider.
Solutions for High-Risk Merchants
As traditional solutions continue to decline for high-risk merchants, more and more merchants are turning to high-risk providers. Alternative lenders are equipped to handle the many obstacles high-risk merchants face. Bad credit or no, limited time in business, high chargeback rates and high-volume tickets and sales are not a problem for these high-risk specialists. Their services allow merchants to setup an account in as little as 24 hours – great news for merchants whose traditional merchant account was unexpectedly closed.
If you are searching for more information on high risk credit card processing services, card machine options, chargeback protection or simply industry news, consider the reviews Best Payment Providers has to offer. You can quickly find the information and helpful tips you need to secure merchant services that are ideal for your business and industry.
Author Bio: Payment industry expert Taylor Cole is a passionate merchant account expert who understands the complicated world of accepting credit and debit cards at your business. His understanding of the industry has helped thousands of business owners save money and time.