High-risk business credit card processing is one of the best ways to streamline your business processes. Usually, a professional payment processor knows the high-risk industry very well, which is helpful to keep your money secure and improve your reputation in the market. Nowadays, it is very challenging to find a reputed high-risk card payment processor, so you need to know everything about high-risk payment processing.
It has been identified that the fraud risk gets higher with the growing sales of your company. In such a situation, you need to ensure that the company’s payment processing system is supported with superior security solutions so that your account can be saved from cyber criminals. It is an essential thing for all high-risk merchants.
What do you mean by a high-risk merchant account?
In general, a high-risk merchant account is considered to be an account that processes payments for high-risk businesses to the banks. Usually, a high-risk business used to pay higher fees for merchant services as they are more prone to chargebacks. It has been identified that the bank puts a rolling reserve on the merchant account when their business has many refunds and chargeback history or comes with a high potential of chargebacks. Thus, this money is considered to be used to cover the possibility of fraud or chargebacks.
What’s the difference between high-risk and low-risk merchant accounts?
It is essential for a business to understand the difference between low-risk and high-risk merchant accounts. This can ease your decision to apply for a merchant account. The merchant account providers used to have certain criteria to categorise the businesses based on their potential risk. However, it has been identified that both merchants’ groups have different characteristics. Thus, let’s explore the differences between high-risk and low-risk merchant accounts.
- High-Risk Merchant
When a business comes with more chargebacks, it is considered to be at higher risk. Therefore, it can be said that the most important factors that matter are processing history and industry reputation. Many experts suggest that the chargeback ratio should always be below 0.9{adc88d8f1adf1a030b384f9997561df801954eb9cb290eb3429d16fc57d363ac} of your total transaction processes. When you are looking for High-risk merchant accounts in UK, make sure you are aware of its overall characteristics. Moreover, you need to remember that a high-risk merchant account may vary in terms of guidelines for a certain payment processor, which includes;
- Excessive chargebacks
- Bad credit history
- Selling of services and products to countries that have high fraud cases
- Average credit card transaction is higher
- High monthly sales volume.
- Low-Risk Merchant
Usually, every payment processor used to set some specific guidelines so that all can follow this. However, there are common characteristics for all the market players. Let’s have a glance at the following general indicators for low-risk merchants:
- Zero to low chargeback ratio
- Lower processed monthly
- Minimised returns
- Very less average credit card transaction
- A merchant operates in a low-risk industry (household goods, low-risk shoes, clothes, baby products, etc.)
- A business operates in a low-risk country (USA, Australia, Japan, Canada, Europe, etc.)
Who requires a high-risk merchant account?
There are many factors that can cause cancellations in the business, which usually result in chargebacks and refunds. It has been identified that many business models or industries are prone to chargebacks. Some of the common businesses listed below require High-risk merchant accounts in UK.
- Game codes and hacks
- Nightclubs/cabaret bars
- Online gaming
- Health and wellness products
- Annual contracts
- Brokering
- Social networking sites
- SEO services
- Multi Level marketing (MLM)
- Hypnotists or self-hypnosis services
- VoIP services
- Merchants with poor credit
- Others
Thus, if you are running a similar kind of business, then you must look for a High-risk business credit card processing so that you can accept credit card payments on the online platform. A high-risk merchant requires to deal with higher costs as compared to regular merchants.
What are the benefits and drawbacks of a high-risk merchant account?
There are many limitations that come with running a high-risk business. Thus, choosing a High-risk business credit card processing can give many benefits that are listed below.
- A high-risk merchant provides you with global coverage so that you can grow your business performance.
- It increases profits by increasing your sales.
- A high-risk merchant provides protection over the high chargeback.
- It helps to expand your business.
When you are looking for High-risk merchant accounts in UK, make sure you know about its major drawbacks. In general, a high-risk merchant account requires you to pay processing rates and higher fees.
Overall, you need to consider certain things while searching for a high-risk merchant account. It includes transparent pricing, technology, responsive support, flexibility and customization, expertise, a security indicator, accepted business models, reading the contract carefully, and checking the high-risk payment processor website. Moreover, you can also consult with We Tranxact Ltd to benefit from the high-risk merchant account.
