Partner with the Best High Risk Merchant

Whether you’re a successful business, or a new entrant in the market, your business cannot flourish if you don’t have a convenient payment mode which customers can use to make payments for your goods and services. An easy to use payment process is very important to enhance business revenue and increase market research. 

If business in not able to accept payment through cards safely, then business tends to lose out in the competition. And if you are high risk business it gets difficult to obtain a high risk merchant account from acquiring banks. For this, you need to contact a high risk merchant account provider who specializes in the process of providing merchant accounts to high risk business. 

High risk merchant account provider / high risk merchant service provider

There are many merchant account providing banks. Yet, acquiring a high risk merchant account from them can be a difficult thing since banks have strict criteria for such accounts. This is when merchants have to look for high risk merchant account provider who specialize in helping high risk merchants obtain high risk merchant account. 

Since there are hundreds of high risk merchant service providers out there, you need to be very careful while choosing the best provider for your needs. Once you have a high risk merchant account, you can immediately begin accepting credit card payments. 

 Things to remember while choosing high risk merchant service provider

·         Research for merchant account providers

·         Make comparison of services provided by each of them 

Chose one with 24/7 service support and low fees and interest rates

Opening a High Risk Merchant Account

Certain kinds of businesses such as travel, cruise, e-commerce, Forex, casino, business process outsourcing, telemarketing and several others mostly operate in a high risk arena. The trade volumes and monetary transactions involved in these businesses are huge and hence have them prone to all kinds of risks both offline and online.

Because of the very natures of such businesses there always lies the possibility of fraud payment, where it becomes essential for these businesses to consider introducing high risk merchant accounts in their system. These accounts can be accessed easily by contacting agents/service providers who specialize in these fields. 

What do these service providers do?

The high risk merchant account service provider works with banks and acts as a gateway for payment solutions. This method helps in protecting clients from various kinds of transaction frauds. However, keep in mind that a merchant account is not the same as a payment gateway. 

Opening a High Risk Merchant Account

The foremost condition put forward by a high risk merchant account provider is that the business should possess a transparent and default free credit history. In case, your business carries an impaired credit history, you may find it difficult to arrange for a high risk merchant account for yourself.  So, credibility is must in order to secure a high risk merchant account.

There are certain businesses which hide away their impaired credit history in order to become eligible for the account only to be exposed later by the service provider, resulting in their own loss. Such behavior is not advisable.

Secondly, make sure you are fully aware about the charges associated with the offshore merchant account that you are considering to take up. The major charges include transaction fee, discount rate, reserve fee, chargeback fees, monthly minimum fees, and e-commerce facilities.

You would find that high risk merchant account providers charge slightly higher fee than the regular accounts. The higher fee charged is on amount of increased risks associated with running such businesses. Also, it’s worth paying a bit more in order to get access to a safe payment transaction gateway that they have in offer.

It’s always advised to thoroughly check for the hidden costs. There are times when businesses tend to overlook certain minimal costs initially only to get troubled by them later.

Once satisfied with the conditions put forward by a service provider, then only apply for needed services.

You are only required to submit certain documents (to the relationship manager of the company) which are needed to open a high risk merchant account with the service provider.

The common advantages offered by a majority of the high risk merchant accounts include:

a.    High charge back threshold

b.    Online transaction reports

c.    Compatible with major credit cards

d.    Round the clock customer service

 It is important that all businesses operating on higher risks must ensure that they have high risk merchant accounts incorporated with their system. Not only will it help in trimming down various kinds of systematic and unsystematic risks in the system, but will also make monetary transactions much safer.

Is it possible to obtain a merchant account even after filing bankruptcy

With the world economy in doldrums for the last few years, millions and millions of businesses were rendered bankrupt. So, does this mean it’s all over for them? Not yet, bankrupt businesses can apply for high risk merchant accounts and once again get their business back on its feet.

Some caution and careful stipulation while filing a high risk merchant account will surely make the application process less complicated:

Bad credit and bankruptcy

It’s a known fact that businesses with a well off financial status can easily obtain a merchant account, but at the same time, even during the dismal phases a business is eligible for applying for a merchant account. Remember that the date of filing bankruptcy plays an important role. According to the Merchant council, if a business is in the active stage of bankruptcy, there are more chances that the application will be rejected. But, in case your bankruptcy has been discharged, and high risk merchant service providers are assured that this account is a step forward to re-establishing business, the chances of the application approval are relatively brighter.  

 Limitations of high risk merchant accounts for bankruptcy

Although, High risk accounts are available to risky businesses including the ones that are bankrupt, merchants impose a few restrictions on them to remain on the safe side. In avoiding defaults of any kind, they play around with the ACH and the rolling reserves.

As far as ACH is concerned, the acquiring banks will delay the transfer of credit card payments into the bank account of the merchant.  Similarly, when we talk about rolling services, merchants will hold back a pre-determined amount of the cash sales and keep them in an interest bearing account in order to minimize the risk of default. 

Pricing of merchant accounts for bankruptcy

High risk credit card processing is relatively more expensive than regular card processing for obvious reasons. Higher the business risk, the higher the price it will cost.  

There are two main systems of pricing here – interchange pricing and tiered pricing. Under interchange pricing, a flat fee along with fixed rate per transaction determines the price. Whereas, tiered pricing divides the transactions into categories, based on the interchange fee issued, and fixes different charges for each category. 

Besides determining this direct fee, bankrupt businesses are expected to pay higher surcharges and other add-on fee.

Are there any alternatives to high risk merchant accounts?

Fling a bankruptcy or having a bad credit history is definitely going to pose difficulties in applying for a merchant account. Some banks ask for cosigners, and it is often that anyone agrees to sign up for a bankrupt business. Another way out is to not apply for a merchant account at all, but use other online services such as PayPal and Google Checkout. But, these have their own limitations. For instance, PayPal does not run a credit check for such services it provides to online businesses.

The above makes it clear that bankrupt businesses can indeed apply for merchant accounts from domestic or offshore merchant account providers, but it will come at some added cost and inconvenience.