If your business is perceived as risky by creditors, you may be a good candidate for a high risk merchant account. Many providers offer these accounts to clients, so there are lots of options in terms of where to apply. Usually, people seek out these accounts when their attempts to get conventional merchant accounts fail.
If someone turned you down for a merchant account due to risk, it may be time to explore the features and benefits of high risk merchant accounts.
What is High-risk Credit Card Processing?
A high-risk merchant account will allow you to do credit card processing at your place of business and/or online.
Sometimes, those who apply for merchant accounts are considered high risk by some providers and lower risk by others. It’s a subjective process in some ways, so you may want to apply for an array of regular merchant accounts before you try applying for high-risk merchant accounts. A high risk merchant account may not be necessary. You may simply have applied with the wrong provider. Some have stricter guidelines than others.
If you continue to get rejected for a regular merchant account, it’s time to look for a high risk merchant account. This account is much easier to get approved for. The downside of this type of account is that you’ll need to pay more for it and also pay higher interest rates. This is obviously something that no one wants, but it’s a necessary evil in terms of finding the credit card processing services that you need.
Since you likely need this account because no one else will give you a regular account, you may expect to pay more. Those who offer high risk merchant accounts know that applicants are desperate and some do take advantage of this by jacking their rates.
Before you apply, try to weed out the really unethical providers. This will be easier to achieve when you spend time researching prospective providers. These days, it’s pretty easy to find out about the reputations of companies via the Web, so do look for anything that you can find which helps you to establish the reputability of a provider, such as BBB ratings, customer reviews and so on.
If a high risk merchant account provider has a great reputation, via a lot of reviews and a good BBB ranking, that’s probably a great company to apply with. Conversely, if a company gets a lot of complaints, it’s one to stay away from.
Be Wary of Extra Charges
When shopping around, consider reputation and also read the fine print on a contract. You should be looking to see if you’ll need to pay termination charges and other expenses. Some providers will ask you to give them rolling reserves for certain amounts and for particular periods of time. They do this in order to minimize their risk in case your business goes under. However, all of these extras will cost you and it’s really smart to know what you’re getting into.
There are plenty of reasons why businesses fall into the high risk category. Mostly, it’s because a business’ niche is considered a risky one. Also, risk is calculated by how sustainable a business really is. As well, the respectability of a company is a factor. For example, gambling and adult entertainment websites may fall into the high risk category based on their respectability alone, although these types of websites definitely have the power to generate a lot of income sometimes.
Now that you have the inside scoop on what a high risk merchant account is and how to get one, you’ll be ready to shop for this type of account online. We’ve tried to educate you by sharing the most important and practical facts about these accounts. Usually, it’s possible to apply online, so why not look for a trustworthy provider today? When you find one, you’ll have a great chance of getting the services that you need.