What Makes a Business Risky?
Successful businesses depend on partnerships with banks and traditional financial institutions even when they are considered High Risk.
These institutions must evaluate potential partners for risk. Businesses that go bankrupt or disappear before paying off their debts can leave banks liable. Such businesses are classified as “high-risk.”
Potential “high-risk” businesses typically include those with poor credit scores, bad reputations or a poor revenue stream. Businesses can also be classified as “high-risk” if they lack assets or a brick-and-mortar storefront.
Online businesses are often classified as “high-risk.” Internet businesses are plentiful among online dating, auction and gambling services we well as adult entertainers, telemarketers and web-hosting companies. All of these business types are considered High Risk for acquiring banks and credit card service providers.
Choose Our High-Risk Merchant Account Experts
SecureGlobalPay can help your High-risk online business process credit card payments quickly and effectively.
At SecureGlobalPay, we offer:
- ACH Processing
- Business Funding
- Chargeback Dispute Resolution and Prevention Programs
- Instant Check Processing Solutions
- High-Volume Payment Solutions
- Merchant Cash Advances
- Mail Order/ Telephone Order (MOTO) Processing
- Online Payment Gateways
- Point-Of-Sale (POS) Solutions
SecureGlobalPay has experience working with high-risk merchants. We offer fair, customized pricing options and quality customer support.
Ready to Process Credit Card Payments for High-Risk Merchants
SecureGlobalPay offers online businesses the opportunity to engage with seasoned service providers who have an appetite for higher risk business types.
We provide credit card processing to businesses in the following industries:
- Adult Entertainment
- Credit Repair
- Tech Support
SecureGlobalPay offers services to businesses with a less-than-perfect credit score or history of bankruptcy.
Similarly, businesses that have had prior relationships with payment service providers terminated will also receive a fair hearing from SecureGlobalPay. Our team is also experienced in working with start-ups, possessing limited or no processing history.
Reasons Merchants are Labeled High-Risk
Each financial institution or online payment processor assesses risk differently. But the two most common indicators of risk are a high volume of chargebacks or suspicion of fraud.
Chargebacks occur whenever products or services purchased by credit cards are disputed. Some industries are particularly prone to this.
Travel sites are classified as high risk because they are more vulnerable to cancellations due to outside factors like the weather. The adult entertainment also accrues numerous chargebacks. Customers use adult entertainment sites then ask for a refund, claiming they never visited the sites.
Gambling, nutraceutical, online dating, and credit repair sites are also prone to high volume chargebacks are also considered High-risk.
Other factors that can cause a business to be considered high-risk include:
- Business location
- Business size
- Credit history
- Credit card processing history
- High chargeback ratios
- Type of industry
- Whether a business exclusively operates online
High-Risk Versus Low-Risk Merchants
Low-risk merchants entering a chargeback monitoring program are given time to fix any problems before being subjected to additional fees.
High-risk merchants are considered fee-eligible immediately. Monthly fees are charged as part of their chargeback monitoring program. Chargeback fee rates are typically greater for high-risk merchants than for others.
What Happens When a Business is Classified as High Risk
High-risk merchants can still accept credit card payments but are subjected to higher processing rates, reserves and monthly volume caps. Banks may also impose up front credit reserve requirement prior to starting a business’ credit card processing service.
Businesses labeled as high-risk can be reclassified. Demonstrating a positive credit card processing history of at least six months with a small number of chargebacks is what everyone is looking for.. Banks and Acquirer’s expect the chargeback rate to be less than 1% of a business’ total transactions.
If your business has been classified as high-risk, fill out our High-Risk Merchant Account application. Let SecureGlobalPay guide you on your journey into the black.