With the rapid growth in technology and e-commerce, business owners around the world are venturing online. Many of these online businesses—such as those in vaping, firearms, adult, travel, tobacco, head shops, and debt collection—operate in high-risk industries and pose higher levels of managed risk to merchant service providers. Brick-and-mortar businesses may also operate in high-risk environments. Because of the nature of their companies, these business owners are apt to apply for high-risk merchant accounts.
Finding the right merchant account provider, however, can be overwhelming for most high-risk businesses. Some guidance may be helpful in selecting the right high-risk merchant provider for your specific credit card processing needs.
When choosing a merchant service provider, consider and compare the rates, fees, and terms charged by each payment processor. Some merchant account providers will advertise exceptionally low processing rates, notably lower than their competitors’ rates. In most cases, these are rates that rise drastically once they “evaluate” your business, with undisclosed fees, or service and product assertions that do not hold up to claims. Higher rates can also harm your profit margins and distort expected cashflows.
Merchants should read through each potential merchant service provider’s “Terms and Conditions” of their merchant agreement to identify any potential pitfalls. Only after careful reading and comparing should you settle on a specific merchant account provider.
Before applying for a merchant account, a high-risk business must undergo a screening process by the payment processor in order to assess the level of risk and liability associated with the business. Most reliable high risk merchant service providers will review your business credentials and decide to approve or decline your merchant account within a business day or two of receiving all the required information necessary to make that assessment. Other qualities of a trustworthy merchant account provider:
- Offer a fast, simple, and easy application process. At Painless Processing, for example, you can apply for a high-risk merchant account online or over the phone. You simply fill out the application on the website and a representative will contact you after reviewing that information to complete the process with you.
- In-house underwriting and risk management department. Merchant service providers that perform this in-house usually have greater control over the approval process and offer the most favorable terms.
- Vast network of financial networks. Reliable merchant service providers, such as Painless Processing, work with an enormous network of financial partners to ensure that they provide services with the best possible terms to the widest array of businesses.
Customer service is changing rapidly. Live chats, e-mail tickets, FAQ sections, and social media, for example, are being added in addition to conventional call centers and service representatives. Before signing up with a payment processor, make sure they have around the clock access in some form in order to know they can always meet your service needs.
At the very least, sign up with a processor whose phone support operates around the clock. When an emergency arises, losing sales because you could not get ahold of someone on the other end for immediate resolution is costly. Beyond phone support, consider other effective, alternative methods, such as support tickets.
Be sure your provider’s customer service fulfills your expectations:
- Does the merchant provider offer a toll-free customer service number?
- Does the provider have well-informed, knowledgeable technical support?
- What are current customers saying about the company?
- How fast does the customer service department respond to complaints?
If the answers to these questions are satisfactory, you gain peace of mind knowing you are working with a responsive high-risk merchant service provider.
Experience with High-Risk Merchant Services
Search for merchant service providers with experience in the product, service, and industry your business is in. With few high risk payment processors to choose from, a high-risk business can find itself at the mercy of the first service provider that accepts it. This can lead to a myriad of problems down the road such as being unexpectedly shut down; paying unnecessarily high rates and fees, or being placed on TMF or MATCH listing that will cause problems getting any kind of payment processing services now or in the future. In addition to that, make sure the merchant service provider you choose offers high-risk merchants fraud prevention and chargeback mitigation tools. Regardless of who you choose, make sure you perform due diligence so you are comfortable with the choice you make.