Do You Need a High Risk Merchant Account?

As you open a merchant account, however, upon applying, you are notified that your business was deemed high-risk. This can happen for a couple of reasons. These reasons include 1)the type of industry you’re in, 2) your chargeback history, 3) a poor credit rating, or 4) because you’re a brand new business. Whatever the reason, this won’t prevent you from getting a merchant account and accepting credit and debit card payments. You may have a higher processing rate and need to provide supporting documents for final approval, but having a high-risk merchant account isn’t as bad as it sounds.

Considerations Leading to a High-Risk Classification

Processing banks declare your business high-risk on three common reasons: your industry, how long you’ve been doing business, and how your business operates. Subscription-based services, skin cream, supplements, or travel memberships are just some of the categories of industries considered high risk. If you are in one of these categories your business is more susceptible to chargebacks, and in particular, fraud based chargebacks than other industries. Expect a higher rate on your merchant account.

Processing banks also take into consideration your business history. Companies just starting out stand out may also be considered as high risk, regardless of the industry. A well-established business will get approved for traditional merchant account more easily if they can prove clean processing experience.

Other high risk account considerations include your business operations are structured. Do your main customers reside in a different country from your base of operations? Do you sell your products and services sold in a card-not-present manner (i.e. ecommerce)? If so, you can be considered high-risk as the potential for fraud and chargebacks is much greater.

What You Can Expect

Be prepared to provide extra documentation with you when applying for a high risk merchant account. If you can show a strong business history and company background, you may receive slightly lower rates. Processing banks look at your financials (particularly your income statement and bank account balances), and your history of accepting credit card payments without issue in the past. Expect the application process to take more time.

Why ePayments PLUS Should be Your Preferred Provider of a High Risk Merchant Account

Placing Your Account:

ePayments+ maintains sound relationship with a number of acquiring banks and several of them accept high risk accounts. With more placed to place your account, you have an increased chance of acceptance and possibly better rates.

Fraud and Chargeback Management:

ePayments+ offers management service offerings for high risk accounts. We use the best tools today and have a propriety method of bringing fraud chargebacks down quickly. Included in our service package are chargeback fighting services. This one-two punch not only saves you the cost of losing the sale and paying the associated chargeback fees, but also allows us to seek a lower reserve requirement.