There are over 1.06 billion credit cards currently in circulation in the United States with at least 108 million transactions taking place every day. Many transactions usually considered lower risk are currently being processed by high risk merchant acquirers. Learn how to properly vet a high risk payment provider by their high risk merchant provider reviews.
According to credit card statistics, 70% of Americans own at least one credit card while 34% carry at least 3 or more cards.
While the number of cards Americans might have owned has decreased over the years, purchases have never been higher.
Any business in a high risk industry looking to thrive in the commercial space needs to be accepting card payments with a high risk payment provider.
Unfortunately, this is not easy because of the many risks involved.
High risk businesses need to consider their options carefully when trying to set up merchant accounts because banks are often nervous about offering these payment services to them.
This is why choosing the correct high risk payment provider is the best way forward. These high risk merchant acquirers offer merchant services that are usually considered unsafe by the rest of the financial sector. By initially reviewing their high risk merchant provider reviews, one can get a better of sense if they are worth pursuing further.
Due to the challenges involved with high risk merchant accounts, a high risk payment provider will often charge higher fees for their processing services. This is a fact!
Businesses considered high risk have a higher rate of fraud and chargebacks. However, high risk merchant acquirers tend to have an appetite for these harder to place business types. They simply are more experienced with these unique business models and often have added layers of security options available to help reduce the risk of chargebacks and fraud.
Low Risk Vs High Risk Merchant Provider Reviews
Before applying for a merchant account with a high risk payment provider you need to be absolutely sure whether your business requires a high risk account. It could be that a low risk merchant account is what you actually need. By carefully reading feedback from their customers while browsing their high risk merchant provider reviews, one can get a better sense of the services they offer.
Merchant account providers identify high risk vs low risk merchants by grouping businesses in terms of the risk they offer. Here are the major differences between low risk and high risk merchant accounts.
General characteristics of a low risk merchant account
- Processes less than $20,000 monthly
- Zero or low chargeback ratio
- Average card transaction is below $500
- Industry is considered low risk e.g. clothes, shoes, kitchenware, food
- Country base of operation is low risk e.g. Primarily USA, Canada & the European Union
General characteristics of a high risk merchant account
- Processes more than $20,000 monthly
- Poor credit history and too many chargebacks
- Average card transaction is above $500
- Business operates in countries with high cases of fraud e.g. Anywhere outside of the US, Canada or the EU
These, in addition to a few other basic characteristics should help determine what type of account you should open. Keep in mind, most payment processors and high risk merchant acquirers will come up with their own set of rules. However, these guidelines are a common place to start.
If you had your account terminated or an application rejected, your best chances of getting another account could be a high risk merchant account.
Also if your business accepts and processes high risk credit cards, you definitely require an extra layer of fraud protection.
Every merchant account provider offers a certain level of security. But industries like gambling, gaming, travel, electronics, auctions and antiques require a higher level of protection.
Experienced high risk providers go the extra length to offer this additional layer of security because they know the difficulties that are ahead. Their high risk payment services also cover clients with low credit and poor chargeback prevention scores.
Choosing the right merchant account provider is the best choice for your business in the long run.
There are plenty of high-risk credit card processors in the market that offer this service. You should not settle for any merchant account service provider. There are important things that you should know before making a final decision.
Tip # 1 Choose High Risk Merchant Acquirers With Multiple Payment Options
Even though card payments will make up a bulk of your transactions, it is risky to ignore other methods of payment.
Your ideal high-risk payment service providers and high risk merchant acquirers should not only accept credit or debit cards. They should also provide ACH, APM’s, e-Checks and Crypto Acquiring Solutions as well.
You should consider this, especially if your business extends beyond the shores of the United States of America.
People in other parts of the world might be more comfortable with other ways of payment besides credit cards.
If you are looking to maximize your business, offer multiple merchant accounts, through intelligent payment gateways for people to pay for your product or services through multiple channels.
Merchant account providers with multiple payment options and 5 star high risk merchant provider reviews, should always be at the top of your list.
Tip # 2 Choose High Risk Merchant Account Provider Reviews With Outstanding Customer Support
Opening a high risk merchant account is far from a straightforward process. There will be plenty of back and forth communication. So you need to have immediate access to support whenever you want it.
When assessing any high risk merchant account provider reviews, always keep an eye on how well and quickly they respond to your enquiries.
Did the support agent patiently explain things repeatedly or were they in a hurry to attend to other matters?
Get a feel of how they deal with you even though you have not committed to any business dealings with them.
If your support representative shows any signs of impatience when you make inquiries or tries to upsell you on things you really don’t need, look elsewhere.
Ideal high risk merchant account providers should have helpful resources on their websites, detailing their services. Frequently asked questions and “how to” content should also be available to throw light on grey areas.
A merchant account provider offering low or friendly fees should not be the only thing that catches your attention.
The major question on your mind when reviewing high risk merchant provider reviews, should always be“ how good is their customer support?” The “perfect” payment processor is nothing without outstanding customer support.
Tip # 3 Choose a Merchant Account Provider That Does Not Require Lengthy Contracts
When looking at high risk merchant account providers, try and avoid the ones asking for long contracts.
Some account service providers lock down merchants in lengthy contracts and force businesses to pay expensive early termination fees if they want to get out.
Getting bound by long-term contracts can occasionally block the growth of your business. This stops you from adapting to needs and changes when they arise. You should only consider month-to-month contracts if they are available.
If you come across a high risk account provider that ticks the right boxes, but is insisting that you sign a long term contract, think again.
The odds are usually against you when you sign a contract and cannot get out of it when you want.
A contract renewable every month gives you the room to change providers when they fall short of your expectations. This sounds good but in most cases, this simply is not possible with higher risk merchant accounts. Negotiating more favorable terms usually depends on your business type, monthly processing volume and chargeback ratios.
Tip 4 # Choose a Merchant Account Provider That Helps Protect Businesses From Fraud
Pick a payment processor that protects your company against fraud. This is a must-have requirement for a high risk business that particularly handles payment processing online.
Your shortlist should contain high risk account companies who take effective measures to protect personal information and potential revenue opportunities from criminals.
These security features include CVV, AVS, 3D secure payment, device identification and risk scoring.
Tools that also capture customer information on websites are important. They help track stolen credit cards used to pay for different travel packages that eventually end up on the black market.
The Payment Card Industry Data Security Standard is a list of requirements that ensures credit card information is stored in a secure environment. It is managed by the PCI Security Standards Council.
The right high risk merchant account provider should be able to guarantee this safe and secure accreditation for your business.
Tip 5 # Choose High Risk Merchant Acquirers That Help Minimizes Chargeback Risks
Chargebacks are unavoidable if you are a high risk business. No matter what you do, there will come a customer that will cancel a purchase and ask for a refund.
Most times, even a no-refund policy is not enough to stop a customer from filing a chargeback claim that makes you lose money on a transaction.
So, when assessing high risk merchant account providers, pick a provider with a good record in chargeback prevention– a company that knows how to minimize your chargeback risks.
Some providers do this by keeping a chargeback database that bans people with a habit of always canceling purchases.
Others use a risk analysis method that fact-checks a customer’s online activity before allowing a transaction to go ahead.
Tip 6 # Choose a Merchant Account Provider With Authentic Online High Risk Merchant Provider Reviews
A high risk merchant account assessment cannot be complete without you reading the honest opinions of other people.
Did the consumers express their satisfaction with the services of the payment provider? Did they have any complaints or reservations?
The best way to always confirm this is by checking out reviews from respectable sources like the Better Business Bureau .
When people are less than impressed with a business or service, it is hard to keep it under wraps. Negative news spreads fast on the Internet.
The honest opinions and genuine ratings of a company providing high risk merchant account services on trusted sites should always play a part in your conclusive decision.
When you see an account provider with loads of negative reviews, it is a clear sign that you should not do business with them.
Keep in mind that some desperate high risk merchant account services use bots and hire people to leave fake reviews.
Always do your due diligence when looking out for authentic consumer reviews.
What You Need to Know About High Risk Fees
It is no secret that high risk merchant accounts cost more because of the unsafe conditions they operate.
Payment providers may charge you setup fees, monthly fees, yearly fees and PCI fees. You might also need to fork out an early termination fee if you close your account before the expiration of your contract.
The details of high risk fees are always included in your contract, always read the agreement thoroughly before signing any dotted line.
It is possible to find an account provider that would not charge you too much in fees. Occasionally, there are high risk payment processors that charge only for transactions on your website–do some research and find them.
How to Apply for a High Risk Merchant Account
Getting a high risk merchant account starts with an online application. If you want to set up your business online, you will also need a trustworthy high-risk payment processor.
The process of applying for this special account is straightforward. If you choose the right payment solutions company, they will do the work and help you find the right bank that truly represents your business ideals.
Once they get your business endorsed by the acquiring bank, you can start accepting online payments as well as mobile payments.
Basic Documents Occasionally Needed for an Application
- Incorporation certificate
- Shareholder’s certificate
- License number and name of organization that issued license i.e. if you run a business that needs a license
- Copy of your passport
- Shareholders chart structure
- Copy of utility bill of local directors and shareholders holding over 15%
- Processing history of last 6 months including transactions and chargeback ratio
- Test user credentials with total access to platform
Be ready to have your business thoroughly examined by risk management experts. They make the final decision in deciding if your business deserves a high risk merchant account.
They check if your business is on the terminated merchant file (TMF) and look at your credit card processing history closely.
If your financial history is far from spotless with cases of fraud or your previous account loss was because of a huge chargeback ratio, you might have challenges opening a high risk merchant account with a high risk payment provider.
Rolling Reserve for High Risk Merchants
A rolling reserve is an extra layer of protection acquiring banks use to protect themselves from fraud and chargebacks.
In other words, when a credit card volume is processed, around 5-10% of that volume is kept aside to make up for any losses. If there are no issues in 6 months, it is paid into your merchant account.
The higher the risk the higher the rolling reserve calculation by the acquiring bank. A rolling reserve is usually used for high risk merchants. But low risk merchants with little credit history because they are just starting out are also included.
Conclusion – High Risk Merchant Provider Reviews
Many businesses are considered high risk. Whether you are in pharmaceuticals, weight loss, telemarketing, firearms or CBD, always settle down with a provider that specializes in your type of business.
Deal with a high risk merchant that will not put you through the hassle of jumping from one bank to the other with your application, hoping something works out
It is in your best interest to deal with a confident and competent high-risk account provider with an established record and not a provider that plays the guessing game.
Using these tips will help you find the best payment gateway for high-risk businesses and the best merchant provider fit for your business needs. If you choose the right merchant account provider it will drive your business forward.