By Vannessa Guevara February 12, 2019
At first glance you may not understand the stigma behind being a high risk merchant account. One of the glaring issues is that there is no clear cut definition of the words “high risk.” In many cases, it has more to do with certain circumstances than a company’s performance.
The most accepted definition of “high risk” merchant account is one in which chargebacks are more likely to occur. In any business where customers are likely to cancel recently made transactions, this presents a high risk to merchant account firms.
The industry your business deals in is the biggest indicator of whether it will be considered high risk. Credit card processing is shakier with this type of business than it would be with others. If you work in any industry considered high risk you will be required to comply with certain laws on the federal, local and state levels.
One of the most important things to comply with is the rules of OSHA. Anytime your business must clean up hazardous waste, OSHA requires two employees or more to complete the task. These are the types of regulations you would have no choice but to follow.
There are certain factors that determine if you are considered a high risk merchant. The more of these factors that hold true for you, the more difficult it is to ensure your payment processing endears merchants to your business. These factors include the length of time you have been in business as well as where you operate from.
It helps to always maintain a positive working relationship with the merchant accounts you already have. This puts you in a better position to work with new ones in the future. It also helps if on a personal and professional level, your credit is good. If even your personal credit history is less than desirable you may struggle with credit card processing merchants.
Believe it or not, there are actually some advantages to being a high risk merchant. Despite the fact that you will likely pay higher fees than other businesses, you may have more merchant options available to you than they do. When you are considered a high risk merchant you are able to sell more products and services than other businesses. You will also likely have better luck with special sales because your sales volume will be much higher than the competition.
Another advantage of high risk merchant status is that it allows you to make your business worldwide. You will be able to reach an international customer base, allowing you to expand quickly.
In conclusion, being a high risk merchant account can actually make tasks like payment processing easier for your business than for others.