By - Hanny

High Risk Merchant Accounts For Small Business

As a business owner, you strive to ensure your customers are as satisfied as possible. In today’s ultra-competitive business world, part of that means making sure they are able to access a range of payment options when purchasing a product or service. But, while ‘ordinary’ businesses may find it easy to access cashless payment solutions, it is hardly the case for high risk merchants.

Being deemed high risk comes along with loads of concerns especially when you are forced to apply for a high risk merchant account. Still, the situation isn’t hopeless. Knowing what to expect as a high risk business owner may help you secure a great deal and avoid unpleasant surprises.


Understanding High Risk Merchant Accounts

In the past, many business owners were denied a merchant account as they were considered “high risk”, usually because the business type typically struggles with chargebacks, fraud, or sales of questionable products and services. It could also be because the business owner has a poor personal credit. Banks and merchant account processors are often cautious when dealing with high risk businesses as they pose risks to their reputation.

Merchants with poor person credit histories often wonder why their credit matters during the account application process. But the truth is that merchant accounts are also a form of credit since the bank pays the merchant before money is collected from the customer. What this means is that banks consider credit card payments made to a merchant as loan for a short period of time. Merchant account processors are also prone to risks due to possible fraudulent activities by merchants, so the credit history is a great way to insure themselves against fraud to a reasonable extent.

If you have a poor credit history, do well to contact a merchant account processor that specializes in providing high risk merchant accounts for high risk merchants or poor credit merchants . These processors offer tailor-made services to high risk businesses, but the rates are usually higher than traditional merchant accounts.

Is the “high risk” designation really doom and gloom for a business? How does it impact your business?

Well, in some cases, being considered high risk means that your application for a merchant account will undergo extra scrutiny. The financial institutions involved may require that you have a certain amount of cash reserve or may even limit you to a specific number of monthly transactions. As noted earlier, a high risk designation also attracts higher processing fees. But there are benefits of having a high risk account too.

Two of its benefits include:

  • Ability to Manage International Transactions

When it comes to managing international transactions, low-risk merchants have several limitations. On the other hand, the limitations are fewer for high risk merchants, which makes it possible for them to reach their global expansion goals.

  • Flexible Payment Acceptance Options

Low risk merchants are limited to accepting certain types of credit card payments. The limitations are fewer for high risk merchants, meaning they can sell a wide … Read More..