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How to Process Payment Safely If You Are A High Risk Merchant

August 10, 2021

For business owners, finding a credit card payment processor you can trust can be difficult. If you’re a high risk merchant, this task can become even more complex. 

That being said, there are some benefits to having a high risk merchant account and many ways to make managing this account easier. It’s important that high risk merchants work with processors who understand their unique struggles and the ins and outs of their industry. Not every high risk business owner has gone through financial trouble, some are simply in an industry that is deemed high risk. You shouldn’t be penalized just because your business falls into a high risk category.

Improving your bottom line and sales potential is at the forefront of every business owner’s mind. You know that as your sales rise, so too does your risk of fraud. That’s why having a strong payment processing partner is essential to business success and longevity. 

In this article, we’ll discuss how to process payments safely as a high risk merchant and what that process looks like. We’ll also give you some actionable tips on how to improve this process for your business.

Let’s get started.

What Is A High Risk Merchant Account?

High risk merchant accounts exist to service high risk businesses. There are many reasons a business may be deemed high risk. For example, businesses that have a history of defaulting on payments, any business in the cannabis industry, and industries that are prone to chargebacks or fraud are usually deemed high risk. 

Even if your business does not suffer from the problems listed above, you may be deemed high risk for circumstances out of your control. 

High risk merchant accounts often have operating penalties associated with access. These can include higher transaction fees, rolling reserves, and other unforeseen costs that hurt your bottom line.

More examples of high risk businesses include travel, adult entertainment, advanced bookings, forex, pharmacy, gambling, gaming, and so on.

It’s crucial that high risk businesses work with a high risk payment processor who holds specialization in their market or niche. Choosing a payment processor that ensures top-level security is also essential for these businesses. 

Difference Between Low Risk and High Risk Merchant Accounts

High risk merchant accounts operate within different parameters and are subject to different fees. Chargeback fees, rolling reserves, monthly fees, and PCI fees should all be considered before committing to a payment processor.

Low risk merchant accounts usually fall into the following guidelines:

  • They process less than $20,000 monthly
  • Their average credit card transactions are less than $500
  • They have a zero to low chargeback ratio
  • They operate in a country that is considered low risk (Europe, USA, Canada, Australia, Japan)
  • They have minimized returns
  • They operate in an industry that is considered low risk (clothing, household goods, cleaning products)

High risk merchant accounts usually fall into the following guidelines:

  • They process more than $20,000 in monthly sales
  • Their average credit card transaction is more than $500
  • They sell products or services to countries known for high levels of fraud
  • They have a bad credit history or history of excessive chargebacks

If you’ve been deemed a high risk merchant, don’t stress. While high risk merchant fees can be high, there are a wide variety of processors with competitive rates that you can approach. Check out our services to learn more.  

How to Process Payment Safely If You Are A High Risk Merchant

The best way to process payments safely as a high risk merchant is to choose a payment processor that is reputable and safe. Your payment processor should have tight security protocols and a strong platform to host your payments. 

These days, there are so many different credit card processors it can be difficult to know where to start. Here are a few things to look out for when choosing your next payment processor:

  1. Security. A good credit card payment processor should offer anti-fraud tools, AI fraud checks, real-time updates, and secure servers that can’t be hacked. Be sure to choose a reliable chargeback prevention system if you are a business that generates more chargebacks or fraud attempts.
  2. Pricing. Your credit card processor should offer transparent pricing with no hidden fees or costs. Study their payment terms and be wary of long-term contracts or high annual fees. 
  3. Industry. It’s important to choose a payment processor that is familiar with your industry and business model. They should have previous experience with other businesses in your industry and should be able to offer incites and advice to you.
  4. Flexibility. As a high risk business, you likely have a host of potential risk scenarios that you need to be protected from. Choose a processor that won’t penalize you in a worst-case scenario and be wary of hidden conditions. 

Don’t forget, just because you’re a high risk business doesn’t mean you have to suffer. Get high-quality, secure, fairly priced payment processing today!

Get Started With Transcend Pay Today

Transcend Pay was built to help high risk businesses take control of their payment processing without high fees or long contracts. We believe that both low risk and high risk merchant accounts should have freedom, flexibility, and agency over their credit card processing.

We offer no reserve requirements, no hidden processing fees, interchangeable and transparent pricing models, and same-day pre-approvals. Our interchange-plus transparent payment model allows you to see detailed data on your fees for each transaction, so you’re never surprised at the end of the month. We also approve 99% of high risk merchants, so your business is safe in our hands. 

Not to mention, our online payment processing technology lets you accept credit and debit payments quickly and easily, meaning you can spend more time growing your business. Never before has payment processing been so simple and worry-free!

Interested in getting started with Transcend Pay? Get a free quote today and let us help you own your credit card processing system.