High-risk merchant accounts are services that enable companies to accept credit card payments from customers. It’s nearly impossible for an eCommerce business to survive without accepting credit or debit cards in today’s time. Based on various characteristics, credit card processors divide merchants as either high risk or low risk. High-risk merchants have fewer options for processors, as well as higher fees and more stringent contracts.

Why do you need a High-Risk Merchant Account?

Any processor you approach will take a close, in-depth look at your firm to see if it fits their definition of “high risk,” which is based on the financial risk it poses. Particular businesses like adult entertainment, gambling, bankruptcy legal companies, etc., almost automatically receive the label. Also, the label can be achieved by merely having low personal credit or high average ticket sales. The travel industry is an example of a high-risk business, as many causes can cause cancellations. That frequently results in a large number of refunds and chargebacks from customers. If your business falls under any of these categories, you need a high-risk merchant account.

Many processors only work with low-risk merchants, whom they consider to be a safer investment. As a result, high-risk businesses will have a limited number of potential processors to choose from. However, merchants who have high risk merchant accounts at Shark Processing are pleased with the services they provide. 

How to Choose a High-Risk Processor for your Business?

If you think you are a high-risk merchant or have already been labelled one, you need to find a processor that meets your requirements. These are some of the main points you need to consider.

1. Examine the Processor’s Accepted Business Types

Just because a processor is a high-risk specialist doesn’t mean it caters to all high-risk businesses. Some high-risk providers, for example, will accept cannabis merchants, while others will not.

2. Look for a processor that can provide load balancing

Load balancing allows you to distribute your transactions across multiple merchant accounts connected to a single payment gateway. That has several advantages. One of them being, if one of the accounts fails, you’ll still be able to rely on the others.

3. Read Your Contract Carefully

Because most high-risk merchant account providers work with multiple processors, their rates and fees may vary. As a result, pay close attention to the rates you’ll be charged and ensure you’re aware of any additional fees. 

4. Look for the technology.

You have to determine if the payment gateway you’re considering offers multiple accounts. Furthermore, request the APIs for the payment platform so that you have complete control over the setup and payment process.

5. Fees You Pay for Your High-Risk Account

There are inevitable fees that you need to face with an account labelled high-risk. Therefore, you have to be ready to pay greater processing costs and account fees.

– Rolling Reserve 

A rolling reserve is an extra layer of defence for the bank against chargebacks or other unforeseen events, for instance, fraud instances on your end. The purchasing bank calculates a bigger rolling reserve the higher the risk that the business entails. 

– Chargeback Money

Chargeback fees may apply if a cardholder requests a chargeback and the bank disputes the charge. It is the money that is used to cover the chargeback’s administrative charges.  

In general, high-risk merchant account fees can cost twice as much as low-risk merchant account fees. You can negotiate rates with a payment processor if you run a business that processes many daily transactions. However, having high-risk merchant accounts at Shark Processing means you do not have to pay them as long as you don’t get paid. Amazing, right? 

Best Processors to Choose in 2021

The top high-risk account providers have a few qualities in common, making them the most trusted processors. The transparent onboarding process, personalised customer service, and equitable contract terms are some of the qualities of these processors.

1.    Shark Processing

This company has its name as an established payment processor for high-risk merchants. The company has exclusive banking relationships and are held directly with tested financial institutions. It assists merchants in dealing with payment processing problems that are inevitable. It also uses its network to select the most reliable high-risk banking partners with the finest long-term opportunities.

2.    PaymentCloud

PaymentCloud works with a network of third-party processors and acquiring banks to get high-risk businesses accepted. However, merchant feedback shows that its fees and rates are pretty affordable. It also conducts all the extra work required to accept a high-risk account without charging you any application or account setup costs. 

3.    Durango Merchant Services

It is one of the most experienced and reliable high-risk merchant service providers in the industry. The organisation has a wonderful reputation for being honest, charging fair prices, and providing good customer service. Durango charges based on a quote system and does not publish fees or rates on its website. Similar to having high-risk merchant accounts at Shark Processing, it can also set you up with an offshore account.

4.    Soar Payments

This company specialises in serving the high-risk community and offers low-risk businesses very competitive prices and terms. Soar has a limited number of terminals available but reserves its “free” terminals for low-risk merchants.

5.    Easy Pay Direct

A high-risk specialist, it offers its unique EPD Gateway as its principal product. It’s especially useful for high-risk organisations that frequently surpass the monthly processing volume limits of the underwriting processor.

6.    SMB Global

It is a merchant account provider that specialises in high-risk and offshore enterprises, especially those in the travel industry. SMB Global can authorise a merchant account for practically any high-risk firm using a variety of back-end processors. 

To conclude, the provider with the cheapest rates doesn’t always need to be always the best overall option. Intangible elements like superior customer service can make a somewhat more expensive provider a better long-term investment.

Image by Ahmad Ardity from Pixabay 

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