When it comes to picking a payment processing provider, do not be swayed by claims that they can open your high risk merchant account instantly. A high-risk eCommerce merchant account instant approval does not exist. If you are looking to accept high-risk credit card payments, you will need to practice some patience as the amount of time it takes to get approved takes much longer than a standard, low-risk merchant account.
While merchant accounts for low-risk businesses can be instantly approved, most take around 2 business days to go live. High-risk business credit processing merchant account instant approvals simply will never happen. Business owners with bad personal credit histories, high percentages of chargebacks and riskier business models take much longer to get approved because of the increased risks involved.
On average, high-risk merchant service approvals take 3-7 business days to be sorted out, and in some cases it stretches into a couple of weeks.
Many high-risk credit card processing providers say they offer instant approval for high-risk merchant accounts, but this is misleading.
With all high-risk payment processing providers singing a different tune when queried further.
High risk merchant account approvals tend to be a 2-step process. The fast approval that is usually touted is the proposed account being pre-vetted with a payment provider.
The second approval is done by an acquiring bank or back-end processor that underwrites a merchant’s account. This process takes longer and will ultimately determine the fate of the merchant’s ability to accept payments.
Some providers downplay the second approval process and advertise the shorter process in their quest to attract customers even though it is deceptive.
Why You Should Avoid Instant Approval Merchant Account Providers for Higher Risk Business Types
One major reason why you should avoid providers that offer instant approval accounts is that they usually try to get merchants on a lengthy contract and an expensive early termination fee.
These providers tell you they are on the verge of approving your account for high-risk credit card payments and encourage you to sign the dotted lines of your contract.
If the approval is denied, you will need to make sure that you cancel and terminate the payment gateway immediately. Failure to do so will continue the monthly billing associated with the account.
Another reason you should steer clear of these instant account approval providers is that they are usually not equipped to properly underwrite bad credit merchant accounts. Merchants in need of high risk processing solutions need to talk to high-risk merchant processing specialists. Merchant accounts with bad credit need creative solutions that only experienced high-risk payment processors can provide.
Instant Approvals for Low-Risk Businesses
The quickest way to open a merchant account in the low-risk industry is to apply with one of the many payment aggregators or PSPs. Some of the most popular payment service providers are Stripe, PayPal, Square, and Payoneer.
Unfortunately, (PSP’s) payment service providers do not offer their services in the high-risk industry.
These PSPs are not exactly merchant account providers, instead what they do is aggregate their users under a single merchant account, where every user owns a sub-merchant account.
These sub-merchant accounts often get approved instantly or within 24 hours because they undergo a minimal underwriting process. High-risk credit card processing merchants do not have this luxury.
However, these types of transactions are placed under more scrutiny than transactions processed by traditional merchant bank accounts, where the underwriting process is more expensive.
A lenient underwriting process is a reason why PSPs have a higher number of problematic transactions which usually result in frozen funds or terminated accounts.
3 Ways to Increase Your Chances of Approval
While it is impossible to enjoy high-risk merchant account instant approval, there are ways to speed up the process and boost a merchant’s chances of getting accepted quickly.
Work With a High-Risk Specialist: A merchant should always work with a high-risk payment provider with plenty of experience in their industry when accepting high-risk credit card payments.
The provider should also have a proven track record of working with businesses in your niche.
Competent high-risk providers always make sure a merchant’s paperwork is in order in order to avoid unnecessary delays.
They also have an impressive network of acquiring banks and processors at their disposal. And go through a painstaking process to find the ideal one in the best position to approve your business.
Be Upfront With Business History: Do you sell cannabis or medical marijuana? Are you in the adult entertainment industry?
Have you filed for personal bankruptcy before? Did you have your previous high-risk merchant account terminated?
In desperation to get approved, some high-risk merchants misrepresent the facts and are economical with the truth.
But merchants should avoid falsifying documents for approval because it is only a matter of time before you are found out. And when that happens, you could lose your opportunity of opening a high-risk merchant account permanently.
A merchant should never hide anything from the underwriting team when looking to accept high-risk credit card payments. In fact, being honest can work in your favor and get your account approved faster.
Proper Documentation: High-risk merchant account providers demand more information than low-risk merchants.
Present valuable information with your application, rather than waiting to be asked as it slows down your approval process.
Ensure that the documents are scanned and saved as PDF files so that they can be conveniently e-mailed to the provider.
Basic Requirements for High-Risk Merchant Account Approvals
- CV of business owner
- Photo ID
- Utility bill (to confirm physical address)
- Business plan
- Reference letter from bank
- Processing statements from the last 3 months (for high risk merchants switching providers)
- Copies of banking statements for the last 3 months
- Copies of supplier agreements (for retail merchants)
- Articles of Association (where applicable)
- Articles of Incorporation
What to Look for in a High-Risk Merchant Account Provider
- Responsive customer support
- Transparent pricing
- Advanced technology
- Customization and adaptability
It is not easy to get a high-risk merchant account approval. If your approval is refused multiple times, do not be forced to sign up with any provider.
And fall for the scam that a high-risk merchant account can be approved instantly.
A simple Google search for “high-risk merchant accounts” will unearth dozens of ads from providers claiming they can open high-risk merchant accounts instantly.
Resist this temptation because it can cause you severe problems down the road.
There are dependable providers in the high-risk industry that can get you approved in a timely manner to accept high-risk credit card payments.
Secure Global Pay is one of the best payment processors around. They have an impeccable track record of high-risk merchant account approvals.