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Understanding High Risk Merchant Accounts – What Are They?

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Understanding High-Risk Merchant Accounts - What Are They?

If you are in an industry that is considered to be high risk, then you know the struggle of trying to find a high risk merchant services provider that will accept you. Furthermore provide you with critical merchant account services that are needed if you want to take in credit payments and run your business. While you might have given up when it comes to acquiring a high risk merchant account services provider, the truth is that there are several options available to you.

Finding a high risk merchant account provider to help your high-risk business is not impossible, but you do need to be wary of services providers that try to take advantage of high-risk businesses due to their lack of options. You’ll always pay more in transaction fees for a high-risk merchant account, but finding the right merchant services provider for your high-risk business and taking certain steps to lessen the burden that your high-risk business puts on merchant services providers can have a large impact on the experience that your business has when trying to attain a merchant processing account.

About high-risk merchant accounts

The first step to attaining a high-risk merchant account for your business is understanding exactly what it means to be a high-risk merchant and what a high-risk merchant account is. Every business, regardless of what industry they are in, requires a way to take in payments and process transactions for their business. This is an inescapable fact. However, as simple of a concept as this might seem, thousands of businesses across the country have a hard time getting this very essential service for their company because of the industry that they are in.

The acceptance or denial of merchant accounts for businesses rests on many factors, but one of the most relevant factors is the industry that you are in. Some industries are more susceptible to high rates of chargebacks and fraud, which makes it harder to justify doing business with them from a merchant services standpoint. High-risk merchant accounts are merchant processing accounts that are specifically designed to serve those that are in high-risk businesses that might be susceptible to fraud and chargebacks. These services are specifically custom-tailored to provide these businesses with the services that they need while also protecting the underwriting bank from the fallout from fraud and credit chargebacks.

High-risk merchant accounts generally cost more to the merchant in the way of transaction fees, but they also provide merchants with the tools that they need to start turning around their bad transaction defect rates as a result of fraud and chargebacks. These accounts are absolutely needed for any business that finds themselves in a situation of being in a high-risk business without a reliable partner to fall back on.

What types of businesses need a high risk merchant account?

There are dozens of industries that qualify as high-risk businesses. However, the blanket definition for a high-risk business is one that is an industry that generally attracts a lot of credit chargeback transactions and fraud. This includes industries such as travel, with high rates of cancellations and other reasons for transactions going wrong at various steps throughout the process. Others include gambling sites, adult video sites, and other internet businesses that are not necessarily at the forefront of the world economy. However, you should avoid giving in to the belief that just because you are in an industry like this, there is no way to get a merchant processing account.

The industry that your business is in is an important part of determining your eligibility for a merchant services account. This is the truth. However, it’s far from being the only factor. One way that you can overcome issues that you are having with merchant services approval is by providing a good processing history. Even if you are in a bad industry for merchant services, you can improve your situation by proving that your business is trustworthy. You can do this by avoiding fraud and credit chargebacks as much as possible and providing your merchant services provider with adequate documentation of your processing history to verify this.

Applying for a merchant services account for your high-risk business

Now that you know whether a high-risk account is right for your business, it’s time to apply for your merchant services account. This is a fairly simple process, but does require that you comply with a number of requirements that are not very difficult. The most important thing is that you provide your merchant services provider with all of the information that they will need to evaluate the quality of your application and determine whether they will be able to provide you with a merchant account. For most applications, this includes:

  • Government-issued identification
  • SSN or EIN for your business or yourself
  • At least 3 months of bank statements
  • At least 3 months of processing statements, if available
  • Website link to your business with any necessary information

One of the best ways to ensure that you are approved for your high-risk merchant account is to provide all of this information in the most comprehensive and timely way possible. When you provide all of the information that is needed quickly, you greatly increase your chances for not only credit approval, but also approval with affordable rates.

Find the right partner for your high-risk merchant account

If you want to have the best chance at success in your business, then you need a reliable partner that you can turn to for your high-risk merchant services. Without this partner, you are left without robust payment processing solutions or the tools you need to protect your business. Above all else, make sure that you partner with the company that is ready and willing to give you the credit services and guidance that you need to succeed.

 

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