Businesses that don’t have permanent locations and conduct most of their customer interactions over the phone, on the internet, or by mail order are usually considered “high-risk”. A hallmark of such businesses is that they operate at a high credit rate and turnover, making the risk for chargebacks, credit card fraud, and financial failure exit more likely. The majority of banks aren’t willing to work with a business that comes with a lot of baggage, so they shy away from offering credit card services to high-risk businesses. Even if a high-risk business is able to find a bank willing to provide them with credit card processing services, they will be charged higher rates and other undesirable terms.
In this day and age, any business would likely fail without the viability of a credit card processing solution. Therefore, a higher-risk merchant needs to look for a payment processor that works specifically with high-risk businesses. These processors can provide businesses with a reputable, secure, and fair high-risk merchant account, allowing their customers the ability to pay for products and services with credit cards without being face to face with the seller.
WHAT TO EXPECT?
A business needs to know what services are generally offered with merchant accounts. While each high-risk merchant services provider is different, a business can usually expect the following services associated with its merchant account:
- A thorough analysis of the type of product or service the business offers, the method of delivery, and the expected methods of payment.
- Review of previous chargebacks and relationship with last credit card processors.
- Periodic review of risk status and fee structure.
- Criminal background check.
- Training in what types of documents, invoices, receipts, and tracking information to keep.
- Offering a variety of payment options, such as standard credit cards and debit cards. A good processor will also provide high-risk echeck processing services, to allow customers to pay via electronic checks.
- Training in how to read and record credit card information.
- Direct deposit of credit card proceeds into the business bank account.
There are many merchant account providers offering payment processing solutions to high-risk businesses. The account service provider must be very familiar with the structure, products or services offered by its business customer. The fees and services should be customized to fit the business and enhance its productivity to make it a win-win situation for both the business and its customers.