As a business owner, you want your card payment system to work smoothly in the background.
You don’t want to hear about problems accepting payments from customers. You don’t want to waste time sorting out card processing difficulties. That’s why choosing a good service provider is critical.
This helpful guide is intended to point you in the right direction, avoiding some costly pitfalls.
If all this is new to you then click here to learn more about high risk credit card processing, why you might need it and what it entails.
Top 10 things to look for when choosing a high risk merchant processor
There are some features that you should look for in all card payment processors, plus a few really important extras for high risk businesses.
- Size is not important – neither is a fancy website or incentives that seem too good to be true ( as they probably are). Smaller outfits are typically far hungrier and more eager to provide such a superb service that you will never want to leave.
- Customer service is hugely important – Blips happen to the best run businesses and payments can cause difficulties even for the Amazons of this world. Issues will happen and you want a provider that definitely prioritizes customer service.
- Specialization is critical – E-cigarettes and CBD are extremely high risk businesses for obvious reasons. So is furniture sales even though they are totally different industries. You want a service provider that works with your industry. A high risk merchant processor that understands your customers and the challenges of your industry is the one you’ll want to work with your business as well.
- Good anti-fraud systems – If your business is considered high risk, fraud may be one of the elements that acquiring banks and card processors are afraid of. Excessive occurrences and a high ratio of chargebacks could mean you lose your merchant account. This could be disastrous for your business.
- Affordable transaction charges and other fees – You will pay a little more for a high risk merchant account than for a regular “low-risk” one. That’s how card processors mitigate the higher risks of doing business with you. Ensure they are affordable within your business model.
- Fast payout – Expect that it could easily take anywhere up to 7 days for processed payments to reach your account or perhaps even longer depending on the business type and risk factors involved.
- Short contract or none at all – Ideally, your chosen card payments processor could impose a minimum contract period, which is not rare. Most service providers will require a minimum term but be aware of it and ensure your business can live with that requirement.
- Fair early termination charge – If you are obliged to sign up for a minimum contract period, make sure to double check that the charge for early termination is acceptable. Some unscrupulous providers levy hefty fees if you want to switch providers before the end of a contract.
- Rolling reserve – Card processing companies protect themselves by retaining a portion of every transaction for a specified period of time before releasing it to you. This can have a significant impact on cash flow. Therefore it’s important to calculate how much the reserve is likely to be and for how long it will be retained.
- Chargeback resolution system – Merchants get frustrated when customers initiate chargebacks directly through the card issuing bank without first raising a complaint with the merchant. It means a black mark on your payment processing record. Too many of those and you can expect your funds to be put on hold and your account possibly being terminated. Look for a provider who will involve the merchant immediately when a chargeback is raised, allowing you an opportunity to resolve the issue.
Don’t do this when choosing a high risk merchant processor . .
The chances are that you have already been rejected by one or more of the big name merchant account providers. Right now you may be starting to panic a little.
After all, if you can’t accept card payments then your business could be stifled. Whether you run a bricks and mortar storefront or an e-commerce website (or both), customers expect to pay by credit and debit card or they will go elsewhere.
Don’t worry – help is at hand.
There are 3 key things to remember about high risk merchant account applications:
- There is a high risk merchant processor out there for every type of legal business
- Resist the temptation to grab the first deal that is offered to you – it could be disastrous
- The cheapest option may not be the best – cost alone is not the most important factor
Obtaining a high risk merchant account provider – specialization is the key to success
Specialization can be considered as one of the surprising outcomes from the financial crisis of 2008. That’s because banks and financing institutions tightened their lending criteria. It became very difficult for smaller to mid size merchants to raise capital.
But every cloud has a silver lining.
Necessity became the mother of invention and a multitude of alternative finance sources sprang up. The demand for money was plain to see. New means of supply were not far behind.
For example, asset finance providers cornered a significant share of the market. That is simply using an asset as collateral for a loan, rather than personal guarantees by directors as banks had demanded for decades.
Specialists focused on specific industries and became extremely familiar with how they operated. This means they could properly tailor loan deals on a case by case basis. Clients (business owners) were happy and the service providers thrived.
Competition amongst providers also exploded, which was of great benefit to businesses.
Specialist providers of high risk merchant accounts deliver an excellent service
Just as smaller to mid size merchant’s found it difficult to obtain finance back then, owners of businesses considered to be high risk, have had difficulty in getting accepted for merchant accounts.
The reason is really simple. Providers prefer safe, low-risk businesses because they have lower risks of fraud and chargebacks. Those are the two elements that cost banks and card processing companies money.
So providing merchant account services for supposedly riskier businesses represented an opportunity for savvy providers.
By studying these supposedly high risk industries, they built financial models of potential risks and what level of charges would be required to cover losses. Then they tailored their services by offering to take them on as merchants.
Start here to find a good high risk merchant account processor
SecureGlobalPay specializes in high risk businesses. We have established a network of acquiring banks that accept businesses like yours.
Our acceptance rates are high because we take great care to match your business with a high risk merchant processor that is familiar with your industry. That’s the secret to our success.
Start the process today. Click here to access our online application form.
Alternatively, call 1-800-419-1772 to speak with one of our payment processing experts.