Every business, no matter if we are talking about online or offline, has its own risk level, which is determined from the financial point of view. There are only 3 levels: low, medium and high, and in today’s article we will speak about the high risk merchant accounts, which are used to process credit card payments in high risk industry. To understand better if your business lies within high risk industry, let’s see the list of industries: adult, luxury, MLM, alcohol and tobacco, online gambling, startups, booking companies and most of the financial companies (loans, forex, binary options, debt services etc).
If your business is considered to be the part of the listed industry, then for credit card processing option you will have to open a special high risk merchant account. Risk level is detected by the turnover, fraud possibility and credit rate. If mentioned indexes are high, then none of the payment gateway companies will give you a normal merchant account, because then you and this third-party company (provider) can lose a lot of money. There are exceptions for some companies, which have bad credit rating (were late with payments in past etc), and most of the banks will mark them as high risk business as well. Problem is that in those industries there is a high risk of client to use someone else’s bank card or give false information (gambling industry especially). Some online industries in specific countries have statistically high chargeback ratios, if that applies to your business then it will be marked as high risk as well.
You, as a business owner though have to understand that there is nothing bad in having high risk merchant account, because it is more safe and secure than other accounts, but of course you have to pay extra for that. High risk merchant credit card processing options are very wide, and main difference is between commission rates and level of security against frauds, also processing time can vary. Some payment gateway providers have blacklists, special analytical software which helps to distinguish high risk customers from normal ones, and experience working within this industry is very important. As always, to obtain a high risk merchant account you have two option: go to the bank or speak to online payment specialists. EU Merchant Account will find the best solution for your business as we have established long-term relationship with many experienced financial companies.
High risk bank account for business
Depending on the country you’re doing your business in, your business model and industry there is sometimes better to ask your local bank to setup a high risk bank account, but in our experience this is done rarely. Mainly because of higher commissions and less customer support for your clients. Basically the credit card processing will take longer, can have more mistakes (more bad clients due to lack of experience of the banks within online retail), and after all you annually you will be charged more compared to some third-party company who specialises on online payment solutions.
It could be said, that adult industry within merchants has always been a separate story. First of all, they don’t want to get in trouble because of you. There are some online websites which show prohibited content, and by collaborating with them merchant can ruin their reputation, even though there are little cases like that. Clients, who pay for goods and services within adult category have big chargeback ratio as well as fraud risk is very high, as people will always try to trick you to get the desired access to the closed content.
Overall, high risk merchant credit card processing solutions can have low commission rates, but at the same time be very quick and fraud protected. Our company, EU Merchant Account, rarely says no to a high-risk business owner so feel free to contact us regarding opening the high risk account or any other online payment solutions – we have wide variety of services!