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How High Risk Payment Processors Can Help Your Business in 2021

June 16, 2021

Businesses that have been deemed a high risk don’t typically have the same financial opportunities as other businesses without the same designation. Not only are fees likely higher, but payments are also prone to delays and certain escrow and balance demands may force a business to lose control of their cash flow and make decisions that may not be in the best interest of their business.

For those that have received a high risk business designation, it can seem like you’ll never be able to get ahead of those financial challenges. But the good news is that you don’t have to put up with delays and other problems with your credit card payment processing. A high risk payment processor can help you resume control of your financial future, removing many of the roadblocks and other challenges that can make it difficult to qualify for the best rates or to reduce the burden of your normal day-to-day operation.

What Is a High Risk Designation?

When a business operates in certain industries or sells products or services that are prone to chargebacks and fraud, they are often classified as a high risk business. The problem is that this largely subjective designation means that their credit card payment processing and ACH payment processing may suffer from delays and other hurdles, making it more difficult for the business to operate.

Those that work from home or that run online-only businesses are commonly seen as riskier than other types of businesses, and the same goes for businesses that may not have much of a financial history. A business can also be seen as high risk if their transaction history is littered with examples of fraud and chargebacks, especially if you operate in known high risk industries such as short-term lending, credit repair and travel.

How a High Risk Merchant Account Can Help

For many businesses, a high risk designation can be a real problem. Aside from inflated fees and delays, it also means extra scrutiny and problems that other types of businesses may not have to deal with. Your payment processor may also impose limits such as a certain number of transactions that you can have in a certain period of time or a cash reserve requirement that may strain your cash flow.

If you have enough dings or a problematic financial history, you may even find that many payment processors won’t work with you at all. If that happens during an important time for your business — and let’s be real, each day that your business exists is an important time for your business — you could be left in a position where you can’t do business. 

With a high risk payment processor, you’ll avoid all that. Not only does it mean keeping your business in good standing and capable of processing payments, but it also means reduced fees, less delays and greater access to the money that’s rightfully yours. From quick credit card payment processing to seamless ACH payments and more, a high risk payment processor can help you do more business in less time and keep more of your money when it’s all said and done.

The Benefits of a High Risk Payment Processor

As we’ve already mentioned, there are numerous benefits to utilizing a high risk payment processor if you’ve been deemed a high risk business. Aside from lower rates and more reasonable timelines over traditional payment processors, a high risk processor can also help you expand your payment acceptance options, such as recurring credit card payments or a higher volume of transactions — perfect for those special events and sales — as well as cutting down delays in credit card payment processing and other types of transactions.

For those that have international transactions, a high risk payment processor can help you accept more international payments without issue, helping to increase your global reach and enabling you to pivot where the market takes you. In a nutshell, the right payment processor makes managing your finances much easier than trying to work with the limitations of a high risk designation. Think of it more as a partnership than some kind of fraught vendor relationship — when you don’t have to worry about your payment processing, you can put more into growing your business.

Lowering Your Credit Card Processing Costs

Whether you opt to go with a high risk payment processor or not, there are some things that you can do to help lower your processing costs. 

One of the most important is to minimize your chargebacks via preventative measures. Create billing and refund policies and post them clearly in your place of business or on your website, and make sure customers are aware of your policies before they purchase or during the checkout process. If there are any estimated delays, share it with your customers before they levy those complaints, and offer refunds well before customers ever reach for the chargeback option.

Another way that you can help lower your credit card processing costs is to reduce the other risks that may be associated with your business. If you can vet your customers a little better during the purchasing phase, you may be able to reduce chargebacks and refunds before they have a chance to take place. Reducing the number of charges can also help, so why not offer that monthly subscription in an up-front yearly option that only requires one charge instead of 12.  

But the best way to really reduce your processing costs is to sign up with a high risk payment processor. They’re used to dealing with businesses like yours, and they’ll be more inclined to work with you than to shut off your service when you need it most. You’ll likely get a better rate with a high risk processor, and it’ll also mean less hoops to jump through anytime there’s a problem. Forget about high reserves and steep fees for the most basic transactions — the right high risk processor is a partner that’s truly invested in your success.

Transcend Pay Can Show You the Way

Here at Transcend Pay, we know that having quick and direct access to the standard financial networks that make the world turn is more than a want — it’s a requirement. When you’re jumping through hoops for the simplest transactions, you’re limited in the ways that you can grow your business — and we can help you shift it all in your favor. Contact us today to find out how we can help, or get a quote to see how we can help you save thousands on your credit card processing fees.