high risk merchant highriskpay.com account means that your payment processor has designated your company at risk for fraud or chargebacks. High-risk business accounts pay higher processing fees to offset payment processor risk. This article examines why a merchant account is classified as high-risk and what that means for your business.
What is a high risk merchant account?
A payment processor classifies a merchant account as high risk merchant highriskpay.com if it determines that your merchant account has a higher risk of chargebacks, fraud, or increased revenue volume. There are many reasons why this could be the case. Because you are a new merchant who hasn’t processed payments before or because your industry is careful high risk merchant highriskpay.com and has a high potential for fraud (e.g. controversial products), for example. High-risk business accounts pay higher processing fees to account for this risk.
High risk merchant highriskpay.com means higher fees
Every credit card processing platform differs, but high-risk business accounts will be subject to higher fees. Generally, dispensation fees for all transactions will be higher, sometimes more than double the fees for low-risk merchant accounts. Although lower-risk merchants also pay chargeback fees (a price you pay when a customer arguments the charge directly with their credit card), higher-risk merchants generally pay higher costs.
high risk merchant highriskpay.com may be required to maintain longer contract terms, early termination fees, or monthly or annual fees. High-risk merchant accounts whitethorn also be topic to a revolving reserve. The payment processor holds a certain percentage of your revenue to verify that your transactions were not fraudulent or at risk of chargebacks.
Reasons to consider a high risk merchant highriskpay.com trader
There are many reasons why a payment processing platform might classify you as high risk merchant highriskpay.com , and while some may seem clear, others are more subtle. Each provider has a different set of criteria for high-risk merchant accounts, but in general, here’s what you can expect to be classified as high-risk:
- A large volume of transactions. Merchants can be considered high risk if they have a high transaction volume or have a high average transaction fee. If a merchant processes more than $20,000 in monthly payments or the average transaction is $500 or more, they may be classified as high risk.
- Accept international payments. Suppose the merchant sells to customers internationally in countries listed as high risk for fraud. In that case, they may be considered high risk (any country except the United States, Canada, Japan, Australia, or European countries).
- New dealer. If the merchant has never processed payments before or only has a simple history of processing transactions, they may be considered high risk simply because they don’t have an account.
- high risk merchant highriskpay.com industry. While a merchant may wipe the slate clean, they may be classified as high risk because the industry they operate in is considered to have a higher risk of fraud, chargebacks or chargebacks. For example, subscription-based businesses are classified as high risk merchant highriskpay.com because many people sign up for a experimental and forget to cancel their payments. They often return the cost when they check their statements and see the failed fee.
- Low credit score. The merchant may be considered high risk merchant highriskpay.com if he has a low credit score.
Types of businesses that are considered high risk merchant highriskpay.com
It helps to know ahead of time if your industry is considered high risk merchant highriskpay.com so you can plan accordingly. Some of the companies that fall into this category include:
- adult industry
- Travel, including airlines, cruise ships, vacation planners
- Furniture and electronics stores
- play
- online dating
- electronic commerce
- Multi-Level Marketing (MLM)
- E-Cigarette, CBD and Vibe Stores
- Subscription services and companies with recurring payment plans
- debt collection
High Risk Merchant Account vs. Low Risk Merchant Account
high risk merchant highriskpay.com there are some general characteristics that make a merchant low risk for a payment processor. Low-risk traders typically have:
- Low transaction volume (less than $20,000 per month)
- Average Transaction Less than $500
- Business in a country classified as low risk (USA, Canada, Japan, Australia and European countries)
- a coin
- Too low or no chargebacks and low chargeback rate
- Industries classified as low risk
Please note that your risk profile may change as your business develops. For example, if you go through a period of high growth, the service provider may start to think your business is high risk. Or, if you expand to work in different countries or change industries, this payment processor may consider a change in your risk level. If this happens, your payment processor will change your status or may drop you as a customer if they don’t support higher risk merchants, at which point you’ll need to find a new provider to process your payments.
How do I apply for a high risk merchant account?
To obtain a high risk merchant highriskpay.com , you must complete an online application. Of course, you also want to find a high-risk, reliable payment processor to accept card costs.
The application process for a high-risk merchant account is short and simple. For example, if you choose Securion Pay as your payment partner, we’ll help you find a bank that meets your business needs. Once the acquiring bank permits your business, you can begin processing online or mobile payments.
Pros and Cons of a high risk merchant highriskpay.com Account
High-risk business accounts’ most common drawbacks are higher fees and processing fees. In addition, banks may request a reserve due to the increased risk.
It seems that running a high-risk company is difficult and has many limitations. So is there any benefit to having a high risk merchant account?
Global coverage. As a high risk merchant highriskpay.com trader, you can increase your business act by accepting transactions in multiple currencies and selling to customers outside of countries that are considered low risk. This means you can reach larger markets.
High protection against chargebacks. This means you have a better accidental of keeping your merchant account in good standing. For example, when a merchant with a regular account exceeds the chargeback limit, he may end up with an overdue account. They need to find a high risk merchant highriskpay.com account, which usually equates to a pause in credit card payments.
On the other hand, it’s cooler to keep a high-risk merchant account in good standing and operating, since a single chargeback override doesn’t need to come with account closure. But that doesn’t mean you can neglect handling your chargeback either.
Expand your business. With a high risk merchant highriskpay.com account, you can sell products or services that aren’t allowed when you have a low-risk merchant account, thus giving you more opportunities for long-term growth.
Increase profits. The wider possibilities of products you can sell increase your chances of making more money.
Conclusion
high risk merchant highriskpay.com account means that your payment processor has designated your company at risk for fraud or chargebacks. High-risk business accounts pay higher processing fees to offset payment processor risk. This article examines why a merchant account is classified as high-risk and what that means for your business.
