Getting your merchant account approved can be a daunting task, especially if you’re considered a high risk business. But what’s the problem with being a “high risk merchant account?”
While the products or services you’re providing may be completely legal, these products may carry an invisible price tag of an increased chance of theft or fraud. While being considered a high risk business is dependent on a variety of factors, it’s most commonly based on two main conditions; your business operates within a high-risk industry, and the risk of financial failure exits.
The first condition addresses the volatility of legislation in some industries, such as beauty products, CBD, adult entertainment, gambling, MLM, and many more industries. This poses a concern of legality, health, or safety to some major credit card processors.
The second condition addresses your business’ continued and sustained profitability. If your business is subject to one or both of these conditions, it may greatly affect your ability to acquire a merchant account.
Why would a credit card processor care?
A huge reason is the issue of refunds, which might also lead to chargebacks. High risk industries tend to have high chargeback ratios, meaning there is a demand by a consumer for a retailer to make good the loss on a fraudulent or disputed transaction.
Issues with chargebacks ultimately result in your business losing out on the profit from the sale, and additionally, make you and the issuing bank responsible for the chargeback fees and time lost due to the dispute. Merchants who acquire high chargeback ratios run the risk of losing their payment processing agreements, and therefore, jeopardize your business.
What can you do about Your high risk merchant account?
If you’re struggling to open a merchant account, your first point of contact should be International Payments Processing. With our easy, yet detailed, application process and vast network of acquiring banks, we do our best to make sure you get onboarded effectively, so you can handle the more fun aspects of starting your business.
For a better understanding of high risk in the e-Commerce market, give us a call and one of our expert agents can provide you with a better understanding of your business placement. In the meantime, keep up with the International Payments Processing blog as we provide you with the most current tips, resources, and products to help protect you against fraud and any other factors that could possibly jeopardize your business.