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High-Risk Merchant Account

What do High-Risk Merchants Need To Know About High-Risk Gateway?

The financial world is growing in a positive direction. Every day new enterprises are launched on the market, many of which are high-risk. Nowadays, high-risk enterprises are booming.

According to the RollingStone reports, the CBD market will reach $22 billion in 2022. The prediction made by Statista for the gambling market is unexpected. It will reach $94 billion in 2024. The dating company's revenue will cross to $1,968 million in 2023. These are high-risk enterprises because of the high risk of money laundering, fraud, and cybersecurity threats. It means that their payment gateway ought to be more secure to run their businesses smoothly and securely.

However, This can be a challenging task for business owners. They struggle while find an appropriate payment gateway that supports their high-risk businesses.

Here, will provide a detailed overview of high-risk gateways.

High-risk gateways

A payment gateway is the latest technology to read and transfer the data from the customer bank to a merchant bank account. A gateway that participates in the merchant considered a high-risk is called the high-risk payment gateway.

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These high-risk payment gateways evaluate the risks associated with doing business with such firms before onboarding them, including the risk of processing credit card payments.

These enterprises are also known as high-risk enterprises. Such enterprises' risks are evaluated by looking into their industry, credit card processing history, chargeback history, etc.

How Does a High-Risk Payment Gateway Work?

A payment gateway is required for merchant accounts that accept online payments. Payment gateways are a service instrument that transmits funds for approval and verification. It ensures that online transactions are handled and securely forwarded to the acquiring bank for support, like a POS checkout register. In less than two seconds, everything occurs. Here is a summary:

  • The cardholder makes an online purchase.
  • Merchants and payment processors are linked and offer assistance along the way. The processor then processes the transaction securely before being sent to the payment gateway.
  • Your payment gateway uses tokenization to encrypt sensitive data and submits it for approval to the acquiring bank.
  • If the transaction is valid and no fraudulent activity is found, the processor securely delivers the funds from the acquiring bank to the merchant's bank account. On the other hand, if the transactions are invalid, the processor declines the transactions.

What Does a High-Risk Gateway Offer You?

A high-risk gateway and high-risk merchant account are essential to run high-risk enterprises securely and safely. High-risk merchant accounts require special needs because banks and financial institutions judge them as risky and unpredictable.

High-risk enterprises have a higher level of fraud and chargebacks. This is why high-risk payment gateway comes more secure and safer than traditional payment gateways.

The advantages of payment gateways for high-risk businesses are numerous, but they may be grouped into three main groups: anti-fraud, security, and flexibility solutions. Let's discuss these in brief.

Anti-fraud -

Every payment gateway, either high-risk or low-risk, comes with anti-fraud tools to detect and prevent online fraud. There are too many tools available for fraud detection and prevention. Some of them are -

Address Verification Services (AVS)– AVS is one of the most prevalent fraud detection tools. Most merchants prefer this tool because its success rate is very high. While making the payments, when customers enter their card details, they also enter the billing address and zip codes. AVS verifies that billing address and zip code with what's on file with their issuing bank. Once this process is completed, the payment gateway sends the payment request to the bank. If the information is correct, the bank will approve the transactions; otherwise, it will be denied.

Card verification values (CVV)- Everyone is familiar with the CVV. It is either a three- or four-digit number on the back of credit and debit cards. Only the card's authorized user knows about this number. All online transactions need this number. Here, the high-risk gateway declines the trades if the CVV number does not match.

Visa's 3-D Secure- Another online technique for preventing fraud requires users to provide a 4-digit PIN to confirm their identity. Additionally, it assists in gathering and disseminating intelligence among merchants for additional verification needs.

Flag High- Volume Orders- Credit card fraudsters know that they are operating on borrowed time and must conduct as many high-volume transactions as possible before the card's authorized user knows it is stolen.

Blacklist Functionality- This tool helps to identify the fraudulent, and the payment gateway can filter and block that particular IP address, continuously involved in the fraudulent activity.

Security -

The primary function of any payment gateway, either high-risk or low-risk, is to secure the customers' sensitive data. It generally encrypts sensitive data and adheres to specific security protocols.

PCI Compliant- Nowadays, every merchant that accepts online payment must have PCL compliant. It helps to protect the costume's sensitive data. It is a set of rules, and the merchant has to follow this rule for security purposes. This security protocol involves storing, transferring, and transmitting sensitive data.

Tokenization– Most high-risk gateway use tokenization to transmit the customer's private or sensitive data. Tokenization takes sensitive data and encrypts it into meaningless values and symbols. Fraudsters are unable to decode this sensitive data.

Flexibility -

A high-risk gateway offers more flexible services to the merchant, which helps them to grow their enterprises. It provides a great variety of goods and services compared to traditional gateways.

Multichannel payment processing- High-risk gateway that offers recurring payments and accepts all the major credit cards such as Visa, MasterCard, American Express, etc. It also offers invoicing and alternative payment methods such as net banking, e-wallets, mobile payments, etc.

Allow to accept various currencies– High-risk gateway supports the multi-currency. It means that it allows the merchant to expand their business worldwide. Not only this, but it also saves time by not having to translate currency values.

PayCly can help you.

Now you know how a high-risk gateway helps you to grow your high-risk enterprises. Let's consider how PayCly helps you.

PayCly is one of the leading fintech service providers. We have experience dealing with high-risk enterprises such as gaming, casino, adult, forex, etc. We offer all the benefits to our merchant that we already discussed above.

With us, you can also get the most accessible integrations. We have a powerful dashboard that helps you download reports and detailed payment statistics. We offer 24*7 real-time reporting. Our pricing structure is simple and affordable.

Paycly is the one-stop solution for all things related to payment processing. We fulfill all the requests made by our clients. We successfully support high-risk enterprises by providing the best payment solutions to guarantee cutting-edge features and security.

Final thoughts -

Enterprises that have a higher chance of fraud and chargebacks are considered a high-risk businesses and need a high-risk gateway. High-risk gateways come with stricter terms and conditions. But with the high-risk gateway, the risk of chargebacks and fraud will be minimized. A high-risk gateway has three main features -

  • Anti-fraud tools
  • Security
  • Flexibility

Nowadays, you can get many fintech service providers, but we suggest you go with PayCly. We offer the best solution for you according to your business structure. We can work with high-risk businesses. With us, you can get all the answers in one place.You can get all our details here.