In this fast paced world, business owners are tasked with the responsibility of looking for ways to continually improve how they trade. An important aspect of any business today is the ability to process all sorts of paying methods, most importantly credit cards. For your business to be able to accept card payments, you need to register a merchant account with the relevant service providers. However, not all businesses have it easy when it comes to securing merchant accounts. This is mostly due to their nature that makes them classified as ‘high risk’. In regards to merchant services, risk relates to charge-backs or customer disputes which are affected by the type of product or service offered, the countries the merchant trades, among other factors. Characteristics of a high risk payment processor
Every business is required to pay a certain fee to allow them process credit card payments. However, fees for an ‘allow-risk’ business are considerably low compared to that of a ‘high-risk’ business. Usually one has to pick a specialized payment processor, since not all processors accept high-risk merchants. Other than just the type of business, credit card processors will individually assess your business before determining how much fee you are to pay. It is also common for processors to demand that you have a merchant account reserve as some sort of insurance.
So why should you go ahead and become a high-risk merchant like https://thesoutherninstitute.com/cbd-oil-credit-card-processing/?
Having understood the features of high-risk processors, it may seem as an unnecessary hassle. That is however not always the case. High-risk payment processors could bring an advantage to your business. To begin with, there is the access to a larger market, that of credit card owners, which you did not have before. This is not just an opportunity to increase sales but a chance for an expansion to global markets through the internet. You can be able to trade with multiple countries and in multiple currencies unlike with low-risk merchants that may face some limitations to these.
High-risk merchants also need not to worry a lot about charge-backs as this is a risk already perceived by the card processor company. While it should not be tolerated, high-risk merchants are advantaged as they will be hardly terminated because of excess charge-backs or fraudulent transactions. They also in most scenarios practice the best security measures during transactions to minimize risk occurring. As a result the business is protected, so is the merchant provider and card owners (in case of theft).
The label ‘high-risk’ by credit card processors means that not all businesses are successful to acquire merchant accounts. This then means increased sales and profits for the few that are successful. But to be able to realize full benefits as a merchant, be completely honest with your processor pertaining the true nature of your business. Secondly, always stay prepared for the worst as things may not always work out as you intended. It is wise to maintain at least 2 active high-risk merchant accounts from different providers, just in case.
Finally, try to negotiate with your provider every 3 months, to have your rates, reserves and other contract terms made more favorable to you.