Are your business is classified as high-risk? If yes, then you need a suitable high-risk merchant account.
Today, it is essential for any merchant to have a suitable merchant account because it allows the merchant to accept credit/debit card payments. Obtaining a merchant account is hassle-free work. But, the main point is once your business is labelled as high-risk by the acquiring bank or financial service provider, it becomes challenging for a merchant to obtain the high-risk merchant account.
Obtaining a high-risk merchant account is challenging, but it does not mean merchants cannot get it. There are some ways that help merchants to get instant approval for their high-risk merchant accounts.
Here, in this blog, we will discuss in detail the high-risk merchant account and the various ways that help merchants to get instant approval for their high-risk merchant account. So, let’s start with the definition of a high-risk merchant account.
Once you know what is a merchant account, it becomes easy to understand the high-risk merchant account. A merchant account is a business bank account that is essential to receive electronic funds. Any company that wants to accept electronic payments must need a merchant account.
In the same way, when high-risk businesses want to receive electronic payments they need a high-risk merchant account. In other words - A company that is labelled as high-risk must need a high-risk merchant account so that it can accept the credit/debit card payments hassle-free.
A business that has a history of many chargebacks and refunds is considered a high-risk business. Apart from this, there are many more reasons based on which the business can be classified as high risk. Some of them are -
- High-risk industry type
- High sales volumes
- High credit card transactions
- Accept multi-currency
- A new merchant who never processed payments
In contrast, no centralized organization in the payments sector determines the risk considerations related to a company. However, each bank and high-risk payment processor has its own set of requirements.
If one processor labelled your business as high-risk, it does not mean that any other processor also classified you as high-risk. It depends on whether you qualify as high-risk according to their guidelines. For a high-risk merchant account, the merchant has to pay higher fees.
What Is The Difference Between High-risk Merchant Account And Low-risk Merchant Account?
There is a vast difference between a high-risk merchant account and a low-risk merchant account. Enterprises with high threats need a high-risk merchant account because these enterprises cannot use a regular or low-risk account. Let's check the main difference between a high-risk merchant account and a low-risk merchant account -
|High-risk Merchant Account
||Low-risk Merchant Account
|A high number of cancellations
||Minimal cancellation of orders
|Operates in a high-risk industry
||Work in a low-risk industry
|Average credit card transactions above $500
||The average credit card sale is less than $500
|The average monthly sales volume is above $20,000
||The average monthly sales volume is less than $20,000
|They offer recurring or subscription payments.
||The business usually sells low-risk items.
|Has to deal with fraudulent customers
||Low to nil fraudulent customers
|High chargeback ratio
||Low chargeback ration
|The business has a poor credit score
||The industry has a strong credit score
|Allow merchants to accept multi-currency
||Allow only one type of currency
The following guidance can boost the likelihood of receiving instant approval for a high-risk merchant account, even though standards for certain providers may differ. Prepare to disclose minor information about your company, like chargeback rates, history, bank and financial records, current processing volumes, and many more.
Maintain A Good Credit Score -
Before applying for a merchant account for your high-risk businesses, remove any prior bankruptcies, late payments, or lines from your credit record. Contact a credit reporting agency or a business that manages consolidated credit reports from significant reporting companies to obtain a copy of your credit history. Send them a letter letting them know the issues have been resolved and requesting their deletion from the credit report. Having a strong credit score will have a long-lasting and advantageous effect on the payment processor, regardless of how big or little your business is.
Be Honest -
As a merchant, you must be honest with your service provider. It is necessary to disclose any prior merchant accounts, bankruptcies, liens, or judgments. Supporting earlier financial struggles enhances your reputation, and you may encounter fewer obstacles when applying for a new merchant account. Facts that are part of the public record cannot be withheld.
Be Ready to Pay Extra Fees -
By all means, go for it if you have to abide by particular requirements or pay out somewhat more money to open a merchant account for your high-risk business. It is usually advantageous to give your customers as many non-cash payment choices as you can. Gains come from being able to make money and encourage impulsive purchasing.
Choose a Specialized And Experienced Partner -
Today, you can get numerous merchant account providers, but always remember that all service providers do not support all types of businesses, and not all service provider is reliable and trustworthy. Thus, as a high-risk merchant, you should take your time to choose the best service provider. Always go with a specialized and experienced service provider because they know your business needs and offer you the same.
For your high-risk businesses, you can also go with PayCly. It is one of the leading and widely used payment service providers. It has many years of experience in dealing with high-risk businesses.
Ready With all the Documents -
Before applying for a high-risk merchant account, the merchant must arrange all the necessary documents. Every service provider has their own set of rules, but the most common documents which every service provider asks you to submit are -
- Three to six months of bank processing statements
- Identity proof such as a passport or deriving licenses
- Utility bill for address verification
- Sales tax certificates
- Corporate documents
Along with these documents, the merchant should also be ready with their online websites. The online websites must have the following pages -
- Private Policy Page
- Terms & Conditions Page
- Display the company's legal name and logo
- Contact details are either phone no or email id or both
- Footer with the company name
- Return and refund policy page
- The website is secured with an SSL certificate and uses HTTPS
Once you decide to go with PayCly, you must submit the following documents. With all the above records, PayCly approves your high-risk merchant account within three to seven working days because they have contracts with many acquiring banks and financial institutes worldwide.
Final Thoughts -
Once your business is considered high-risk, it becomes challenging for you to get an instant approval for the high-risk merchant account. Even while it might seem impossible, with the proper planning, you can succeed. However, it requires a lot of labour for totally new high-risk business owners.
We advise starting with a payment service provider that specializes in working with high-risk merchants if you are fully new to online businesses. PayCly is one of the best service providers, especially for high-risk merchants. You can get in touch with the PayCly expert staff without a second thought. One of the top providers of payment services, it gives you many options for a high-risk merchant account and approves your account instantly with all the proper documents.
Contact the expert team to learn more about PayCly's high-risk merchant account.