Has Your Company Been Denied Processing Because you are High Risk?
What are high-risk solutions?
Our industry experts help merchants navigate the complicated matrix of the ever-growing and dynamic world of high-risk processing.
With Payless Merchant Solutions multi-processor relationships we are able to place your high-risk business with the merchant account that best suits your business.
Some internet business models and industries are classified as High-risk payment processing card associations. Several factors can put your business in a high-risk solutions category, but the examples include chargebacks, refunds, and payment processing history.
Some examples of high-risk solutions or business models
Travel, adult films, advanced bookings, forex, telemarketing, pharmacy, gaming, and gambling, are among high risks.The higher the risk, the more chargebacks a business. As a result, industry reputation and processing history factors. Here are some general criteria of a high-risk merchant that can vary greatly depending on the guidelines of a specific payment processor:
- Monthly sales volume of more than $20,000
- Monthly retail sales of more than $20,000
Distinguishes a high-risk payment processor
A high-risk credit card processor accepts to take more risk in exchange for a higher fee. Because the risk is calculated differently than for regular merchants, it necessitates the use of complicated systems. Obviously, this will require a higher degree of engagement in detecting fraud. When looking for a high-risk processing, seek one with a dedicated team that analyzes every transaction and an AI-based system that alerts them when suspicious activity is detected.
For example, Securion Pay’s technology allows you to configure the filters automatically and manually, giving you control over your transactions at any time of day, week, or month. You have a range of tools tailored to match your specific business requirements. The goal is to assist merchants in diversifying risks and decreasing the number of fraudulent transactions to maintain the account healthy and functioning over time. It’s critical to always err on the side of caution and keep underneath the card schemes’ specified limits.
Factors contributing to the company’s “high risk” status
Various dangers make your firm stand out whenever it comes to merchant solutions and payment processors. The following could indicate that your business is at a higher risk.
Clientele, Industry, and Location
Some occupations are more dangerous than others. Some are based entirely on the company’s reputation, while some on the nature of the firm. Stores that sell adult items, for example, are as likely to be classified as high-risk businesses as others who sell firearms. Travel companies,
salespeople, bail bond companies, online auctions, and dating sites are all in the same boat.
Businesses that have never seen a credit card
Businesses that rely heavily on card-not-present purchases are more vulnerable to fraud and chargebacks. It comprises internet-based enterprises, home-based businesses, online dating services, online auctions, and a range of other internet companies. Even companies who sell physical goods but manage the online payments for those goods online are on high risk processing.
Chargebacks have a reputation for being plentiful.
If you’ve had a high number of refunds in the past, either due to payment processing problems, a defective run of items, or other causes, you may have been designated as a high-risk merchant and will need to work a bit harder in the future to establish oneself.
You look for in a high-risk payment processor
There are high-risk credit or debit card processors out there, so picking one that will satisfy all of your needs isn’t easy.
Make sure the payment processor you use is consistent with the economic models you use.
You need a dependable chargeback prevention merchant solution multilayered approach for protection. As highly risky merchants create more chargebacks or fraud attempts. Anti Fraud tools, AI-based fraudulent checks, real-time notifications, and other services are available upon demand.
When it comes to quality merchant accounts, the duration of time the company has been in business and the expertise of its leaders is critical. Their understanding of the ins and outs of niche industries also helps.
Find a high-risk processor that allows you to use payment situations to meet all of the business’s needs, though if your business is complicated. Make sure you can talk about the fees, terms, and benefits specific to your company.
On a payment processor’s website, look for the pricing structure. Make sure you understand how much that will cost and that there are no concealed or additional expenses. You can’t get specific information from a possible high-risk processor partner. Also, keep in mind that as your business grows, your rates may drop.
Advantages of high-risk solutions
One of the most prevalent downsides of high-risk solutions accounts is that higher fees and processing rates are required. Moreover, banks may want a reserve due to increased risk. Running a high-risk firm seems to be fraught with constraints.
There is global coverage.
Accepting payments in numerous currencies and selling to clients outside of low-risk countries can help you grow your company as a high-risk merchant. As a result, you’ll be able to leverage broader marketplaces.
Chargeback protection is high.
This means you have a better chance of maintaining a healthy merchant account. When a merchant with such an account reaches the chargeback limit, their account may be canceled. They’ll need to find a high-risk merchant account, which implies they’ll have had to stop accepting card payments for a while. On the other side, it’s easier to keep a high-risk merchant account open because a single chargeback doesn’t have to result in being closed. However, this does not absolve you of the responsibility of chargeback management.
Expansion of your company
With a high-risk merchant account, you can sell products or services that are not permitted with a low-risk merchant account, allowing you to expand your business over time. Profits have increased. The more things you can sell, the better your prospects of making more money.
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The payment industry typically labels business as high-risk for issues including:
- Poor Credit
- The industry is known for having a high instance of chargebacks or fraud
- Previously being declined, or shut down, by a merchant processor
- Offshore operations – international merchants doing business in countries where they are not primarily based
- The high number of chargebacks
- Industry classification – merchant category code (MCC)
- Questionable products and/or sales and marketing tactics
- Non-compliance with card brands