High Risk Merchant Account

Complications in a High risk merchant account

With every business’ dream of expanding to the global level comes with a risk of the transaction of payments. If we just go back to some years in the past, accepting payments from credit cards was one of the milestones for businesses but now it seems like an ordinary transaction. The risk of the transaction includes accepting payments from worldwide and the risk gets more when you are a high-risk merchant. When it comes to getting approved for a merchant account, being classified as high risk could have significant implications for your business. Just by understanding if your business industry type is considered high risk, you can lookout for a quality merchant service provider. This also helps in preventing the vicious cycle of declined applications and seeking new providers in getting a high risk merchant account. As we all know there is a lot of business that seem to be categorized as high risk, there are many less obvious factors that come into play. Banks consider these factors to assess your business’ risk for credit card processing. 

Factors that make businesses High risk

The manner in which the business is running may also put the business at high risk, but obviously, there are some other factors which tag the business as high risk. However, we can narrow down flour factors, which are the possible reason that can put a business at high risk. These are - Industry type, company, billing model, and processing volume. They just don’t look at what you sell, but they also look for potential for fraud or potential chargebacks. The other factors may include large transaction sizes and long-term deliveries that can open up a business to potential account losses. The term “bad business” has been categorized as high risk by default, such as selling of controversial/illegal products and/or services. Those businessmen who had a previous history of bankruptcy or blacklisted for fraudulent charges in the past put the business in the high-risk category. Even if the business is as clean as a whistle, the banks may judge risk based on the action of other companies and the industry as a whole. Some examples are adult content(products and services), airlines and jet charters, alcohol and liquor, cigars and tobacco, credit repair, cruise lines, debt collections, E-cigarettes and vapes, fantasy sports, etc. 

Getting a high risk merchant account

As a high risk merchant, there might be some conditions to get approval for a high risk merchant account. It includes but not limited to  High risk merchant account limitations and restrictions, Fixed/lower processing limits, a reserve withheld on transactions, limited processing options & gateways, and higher processing rates. Therefore, understanding all the different aspects of high risk merchant services will definitely help you find the best processor, and secure a long term solution. Getting approved for a merchant account is a hassle-free task for non-high-risk merchants with rates, fees, and features being a major concern. 5-star processing provides high risk merchant account to a large no. of high risk merchants.