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Credit Card Processing Options for a High-Risk Merchant Account

Credit Card Processing Options for a High-Risk Merchant Account

Selecting the ideal merchant account provider is difficult for any company, but it’s considerably more difficult if you’re a high-risk merchant. In today’s world, most businesses require the capacity to process credit cards. High-risk merchant accounts are helpful in this situation.

Finding a trustworthy high-risk payment processor can be difficult, but you’ll be surprised how much easier your business procedures will become once you have one. Working with a payment processor who understands the high-risk business will help you boost your reputation while keeping your funds safe.

What Is A High-Risk Merchant Account?

A high-risk merchant account is one for companies with a high risk of fraud and chargebacks from their processor. You may use the type of the business, the owner’s credit, business history, and other variables to determine this. Every processor determines what constitutes a high-risk business, so one processor may consider a company high-risk while another does not.

What is credit card processing for CBD and Cannabis?

Credit card processing allows businesses to accept debit and credit card payments from customers. In most cases, this entails using both point-of-sale (POS) hardware and software in conjunction with a credit card processing company’s payment networks. Depending on the type of transaction, credit card processing service providers may charge a percentage rate of each purchase and a per-transaction cost.

Many processors allow you to set up payment gateways to accept debit and credit cards over the internet. Accepting payments when a physical credit card isn’t present, whether through a gateway or over the phone, comes with a higher rate because the risk is higher.

In the credit card processing industry, the risk is a significant factor. Certain enterprises or entire industries may be classified as “high risk,” leading to higher rates, fees, and terms and conditions than the credit card processor’s other customers.

How to Choose a Trustworthy High-Risk Payment Processor

If you are a high-risk merchant, these tips should help you discover a merchant account that will accept your business and suit your needs:

Check the Accepted Business Types of the Processor: A processor’s designation as a high-risk specialist does not imply that it serves all high-risk business types. Some high-risk providers, for example, will accept cannabis merchants, while others would not.

Look for a processor with load balancing capabilities: You can spread your transactions among many merchant accounts incorporated into a single payment gateway with load balancing. It has many benefits. For one thing, if any one of the accounts fails, you’ll still be able to rely on the others. Furthermore, having multiple accounts allows you to handle more transactions per month, reducing your chargeback risk.

Read Your Contract Carefully: Because most high-risk merchant account providers operate with many processors, their rates and fees may vary based on the merchant account (or accounts) you’re matched with. As a result, pay careful attention to the rates you’ll be charged and ensure you’re aware of any additional expenses. It also doesn’t hurt to ask for interchange-plus pricing or a month-to-month contract, even if you’re not likely to get accepted.

Choosing a credit card processing business for high-risk payments

Conduct your research on high-risk credit card processing services to reduce risk. Look for a business that specializes in your field. For example, there are high-risk merchant account providers who specialize in working with pharmaceutical and wellness businesses. After you’ve narrowed down your selection of providers, go over their policies thoroughly. A monthly service fee, as well as a higher per-transaction fee, may apply to your merchant account. If the processor considers your firm high risk, you could be charged as much as 5% for every transaction.

Although imposed costs will play a significant role in your decision about which high-risk credit card processor to use, you should also consider the processor’s other services. For example, what forms of payment will the business accept? Is the organization able to provide high-risk merchants with services such as POS terminals and mobile payment solutions? Although these services may be more expensive per month, merchant account holders may be eligible for a discount.

Merchant Account and Payment Gateway

Accepting payments online has always relied on a combination of a merchant account and a payment gateway. Authorize.Net (USA), eWay (Australia and UK), and SecureNet (USA) are examples of this type of provider.

A merchant account is a unique business checking account that lets you make payments on a credit card. Your business and your merchant service account are linked by an online payment gateway, allowing the many parties involved in the payment transaction, such as your bank and the card issuer’s bank, to execute the transaction more quickly. Consider it the digital version used in local businesses.

There are fees for both the merchant account and the payment gateway, but there are many options, and some offer lower transaction fees or don’t charge setup fees.

When attaching a payment gateway and a merchant account, ensure that you apply for both, which generally entails filling out papers and submitting financial information. Because processing your applications can take a few days, you won’t be able to start receiving payments immediately away. You’ll need to link your account to the gateway and then your gateway to your store when they’ve both been approved. It usually entails setting up your store with API keys, shared secrets, and tokens.

Because the providers are enormous enterprises with large support teams, you usually get more hand-holding and specialized customer attention when you utilize a payment gateway. You should be able to obtain someone on the phone to answer your questions most of the time. Payment gateways can also provide more flexibility regarding security standards and customization, making them a better option for large enterprises requiring a customized solution.

Bottom Line

It is a challenge to locate the best ways to accept credit cards online and choose the proper payment processor first. It’s the lifeblood of your online business and a crucial cost to consider when selling online – since if you can’t handle payments properly online, you’re out of business.


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