High-risk merchant accounts and high risk merchant processing services by SecureGlobalPay offer a lifeline for businesses that struggle to secure traditional merchant services because of the nature of their business, higher chargeback rates, or other risk factors. With over 25 years of experience, we look forward to speaking with you.
If your business falls into the high-risk category, join us as we unravel the complexities of high-risk merchant accounts and credit card processing. We will cover everything from their definition and operational differences to the challenges and fees involved. Plus, we’ll provide practical advice on selecting the best provider, the sign-up process, and steps to take if you’re denied.
Whether you’re new to the concept or looking to switch providers, we’re here to help you navigate the high-risk merchant landscape.
A high-risk merchant account is a specialized payment processing account designed for businesses that pose a higher risk to the sponsoring bank, financial institution, and payment processor offering merchant services.
Unlike regular merchant accounts, which are readily available to most businesses with lower risk profiles, high-risk accounts come with unique considerations and requirements due to the potential likelihood of chargebacks and fraud.
The key difference between a high-risk and a standard merchant account lies in their terms and conditions. High-risk accounts often come with higher processing fees, more stringent contract terms, and sometimes require rolling reserves or holdbacks as a financial safeguard for the provider.
For better or worse, businesses classified as high risk must navigate these additional hurdles to accept and process credit card payments.
That being said, high-risk merchant accounts do come with some benefits like advanced security measures, higher chargeback thresholds, and the ability to sell high-risk products or services.
Several factors contribute to a business being classified as high risk in the eyes of merchant account providers and financial institutions. Here are the most common ones:
If you fall into one of these categories, you’re likely going to need to get a high-risk merchant account.
During the evaluation, the merchant service provider will make an “either/or” evaluation. You will be judged as either an acceptable or unacceptable risk. The exact evaluation methods and criteria will vary from provider to provider.
As a qualified high-risk merchant account provider that has been doing this for decades, here at SecureGlobalPay, we know exactly what it takes to get these accounts approved.
All of these factors underscore the importance of understanding and managing the risks associated with high-risk merchant accounts, as well as partnering with the right high-risk merchant services provider that can help you manage any arising issues.
Without going into technical details, high-risk credit card processing involves a series of steps, with a payment gateway playing a central role in securely facilitating transactions between the merchant, the customer, and the financial institutions involved.
This process involves not just the handling of credit card transactions but also the implementation of stringent measures to protect against fraud and chargebacks like:
Due to the elevated risk, the fees associated with high-risk credit card processing are typically higher than those for standard merchant accounts. These fees are structured to cover the additional risk and operational costs involved in monitoring and securing high-risk transactions.
Here is a quick breakdown of all of the fees involved:
While these fees may seem overwhelming, most of them are applicable to standard merchant accounts as well. By being aware of the increased scrutiny and costs involved, businesses can better prepare and manage their operations to mitigate risks and maintain financial stability.
Finding the right high-risk merchant payment processor for your high-risk business can be challenging, especially if you are a start-up business on a tight budget and do not want to spend too much on fees.
Be sure to properly research any provider you’re considering. We highly recommend jumping on a call and discussing details with their business representative.
The right provider not only facilitates your ability to accept and process payments but also offers support in managing the unique challenges associated with high-risk operations.
Pay close attention to the following factors during the vetting process:
The final point about pricing is extra important. The pricing should always be listed on the acquiring bank application or readily provided when you ask for it. After this, there should be no further surprises or hidden charges.
If the information you are asking for falls short or is incomplete, look for a different provider.
Before reaching out to high-risk merchant account providers to assist with opening an account, make sure you meet the following requirements:
In the application process, the more information you can provide, the more streamlined the process. Based on your existing processing history and income, merchant services providers can offer various pricing options that are a good match for your business model.
Here is some of the documentation you may be asked for during the merchant application process:
If your merchant account application is denied, that doesn’t mean you are without options. Your first call should be to a SecureGlobalPay customer service representative. We have the experience you need to navigate the application process and will work to find a customized solution for you.
SecureGlobalPay helps businesses accept and process credit card payments quickly and effectively. We offer:
While we can work with any type of business, we have specialized in working with high-risk merchants. We offer fair, customized pricing options and quality customer support.
Learn more by sending a question to partners@secureglobalpay.net or fill out our online application form:
A high-risk account refers to a merchant account designated for businesses that operate within specific industries or have business models that financial institutions and payment processors consider to carry a higher risk of chargebacks, fraud, or regulatory issues.
This classification can be due to various factors, including the business’s industry, financial history, sales volume, and the countries they serve. High-risk accounts often come with stricter terms and higher fees to offset the increased risk to the provider.
The rates for high-risk merchant accounts vary widely depending on the provider, specific risk factors, and the services offered. Generally, businesses can expect to pay higher fees than standard-risk accounts, including higher transaction fees, monthly account fees, and potential additional charges such as rolling reserves, chargeback fees, and setup fees.
A high-risk transaction is one that presents a higher likelihood of chargeback, fraud, or non-compliance with payment industry standards. Factors that may categorize a transaction as high risk include the transaction’s size, the type of product or service being sold, transactions that involve recurring payments, sales in countries with high levels of fraud, and any transactions that do not adhere to the payment processor’s standards for secure and legitimate business practices.
Yes, if your business is categorized as high risk, you’ll likely need a high-risk payment gateway. A high-risk payment gateway is specially designed to handle the complexities and increased scrutiny of transactions associated with high-risk industries.
High risk payment gateways offer multiple merchant account payment processing, enhanced security features, fraud protection measures, and the ability to accept various types of online payments that standard gateways might not support. A high-risk gateway ensures that your business can securely and efficiently process payments while complying with industry regulations and standards.