You’ve heard the term, but now that your business has been labeled as high risk, you have started to encounter one problem after another. What does being labeled high risk really mean? And what does it mean for the future of your business?
Unfortunately, it is true that once your business has been categorized as high risk that you start facing a lot of trouble. The biggest obstacle of all is trying to secure payment processing. Since your business is high risk, your bank and any other traditional provider will more than likely turn down your merchant account application. Why? High risk merchants are known for incurring a lot of charge backs, fraudulent activity, and other issues they want nothing to do with.
But why is your business high risk? In order to find a solution, you must first understand what places your business in this category. The reasons for this label include bad credit history, no credit history, past bankruptcy, limited time in business, high charge back rates or various other factors.
Some of the many industries that find themselves in this situation include:
- Real estate
- Automotive machines
- Debt management agencies
- Computer software and hardware
- Financial services
- Travel and hospitality
- Airline tickets
- Construction companies
What to Expect from a High Risk Merchant Account?
It is true that rates involved with a high-risk merchant account will be a little higher than the average merchant account. Depending on your business, some providers might charge you 2 to 5 percent per transaction. While the terms and rates will differ depending on the provider you choose, there are many benefits in securing an account – not an easy task for a high risk business.
Many providers offer a fast, simple setup process that takes just minutes to complete. Your merchant account can be approved in as little as 24 hours. You also gain access to a team of experts, charge back protection and prevention programs and multiple payment gateway options. Here are just a few of the realities of the payment industry, and why a high risk merchant account matters:
- Consumers today prefer to pay online for convenience; you should expect 50 percent of your customers to prefer digital transactions.
- 70 percent of the population uses an online transaction to pay for goods or services.
- It’s important to keep the charge back ratio below 2 percent; a high risk provider can help you be proactive in managing and preventing charge backs.
If you would like to learn more about high risk merchant accounts and how it can help your business, consider working with the experts at EMB. Learn everything you need to know about a high risk account and how to get started.
Author Bio: Electronic payments expert Blair Thomas is the co-founder of high risk payment processing company eMerchantBroker. He’s just as passionate about his business and high risk merchant accounts as he is with traveling and spending time with his dog Cooper.