Setting up a merchant account is an important part of your business. However, if your business is one of the many that are considered high risk, you’ve probably noticed that merchant account fees can be high. There are ways to lower merchant account rates for high risk businesses. Here are tips that will help you get the lower merchant account rates and fees.

What is a high risk business?

First, if you’ve discovered that your business is considered high risk, don’t be too alarmed. Many businesses are seen as high risk by providers of merchant accounts for several reasons. A high risk business usually means that the industry has a history of customer chargebacks or credit card fraud. However, this does not mean that your business is doomed. Understand that the label “high risk” only means that you will want to keep your eye out for any strange customer activity, and always make sure transactions are running smoothly.

A good reputation goes a long way

If you operate a high risk business it’s important that you build a good company reputation by selling high quality products and services. Many merchant account providers will take your work history and business reputation into account when considering the merchant account rates and fees they offer.


Another important aspect to consider is your own personal credit history. Do everything you can to ensure that your personal and your business financials are in good standing. Having good credit can give you more negotiating power when discussing merchant account options.

Shopping for a merchant account

When you are looking for a merchant account it can be beneficial to comparison shop. A little bit of research can save you a lot of money in the long run. When comparing merchant account companies take a look at their different fee schedules, and ask about any up front costs. Be cautious of high cancelation fees.


Keep in mind that there are merchant account providers who specialize in high risk industries. These are providers who already understand the basics of how your business operates and therefore can confidently work with you. For example, if your high risk business is selling e-cigarettes, you may have better results going to a company who specializes in working with businesses like yours.


Another reason to shop around is because some merchant account providers may see your business as high risk while others may not. It is a good idea to compare at least three different companies to get an idea about what options you have.

What to do in your business to keep merchant account fees low

There are a few things you can do as a business to keep your rates low. First, make sure that alongside selling high quality products and services that you also have a solid return policy in place. Make your return policy easy for customers to understand and keep it as simple as possible. This will help you significantly when dealing with customer chargebacks.


If you ship products make sure that you have a clearly stated timeframes for shipping and returns. Be up front with customers about how long they can expect to wait for items to arrive. If it takes up to three weeks for delivery, saying so will keep your customers at ease and prevent early returns.


Ultimately your goal is to keep chargebacks under 3% of your total revenue stream each month. This will help keep your rates and fees low plus this will increase profitability overall. Over time you will also be able to renegotiate rates with your provider or get a better rate down the road from a different merchant account provider.

A few things to keep in mind

If your business doesn’t have to be solely on the internet, it can help to have a retail location. Many merchant service companies see brick and mortar locations as less risky than a business exclusively run online.


In a completely ideal situation, when you apply for a merchant account make sure there are no outstanding liens or judgements that can show up. If you do happen to have something come up, it’s not necessarily going to be a deal breaker. Keep in mind, though, it may have an impact on rates.


You can ask for any non-refundable application processing fees to be waived. This may or may not get the result you want, but it never hurts to ask! You can also search for merchant service companies that don’t employ application fees.


Overall, realize that you are completely entitled to a merchant account even if you have bad credit. You may have to agree to high risk merchant account rates and fees, but you will be able to get an account. Keep shopping until you find the rates that work best for your business.


Learn more about how Painless Processing can help you lower your rates today.


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