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.
Would you rather spend money on accepting credit cards via a superb merchant account, or would you prefer to save money by signing up with another excellent merchant account with the same features? Unless you have an eccentric streak in you, we are sure your choice is the account that charges less for the same features. Any other sensible person, too, would agree with this selection.
Sadly, the merchant industry doesn’t make it that simple for you to compare X with Y. Whether you need a low volume merchant account or a “high risk” online pharmacy merchant account, an abundance of different fees, charges, and billing structures will complicate matters for you when you compare various service providers.
Why don’t we look at the different methods to compare and select the perfect merchant account for your business?
Before we begin, you should keep in mind that acquiring and managing a high-risk credit card processing account will almost always be a little more expensive than standard merchant accounts.
Researching all the pros and cons of the fee structures charged by potential partners has its benefits, and you would be in a good position if you know these. Several providers do not disclose their policies and conditions until you sign up with them, and you may need to request a copy of their rules and guidelines. Once you do that, you are in a position to understand exactly how much you will be paying for the services of a merchant account. Whatever be the case, you must ensure that you fully understand the conditions involved before you sign up with any company.
Having cleared out the basics, you can look for the best credit card processing services with different providers. There are plenty of options, and several different kinds of price structures and incentives for setting yourself up with a merchant account. Each plan has a unique feature; you just have to figure out which one suits your business needs the best.
If are out to get the best possible deal for processing rates for credit card transactions, you have to do quite a bit of research. Comprehensive research for the best possible terms and conditions will benefit you greatly – provided you make sure that the company you are signing up with has good reputability. You surely do not want to be stuck with companies that lack customer service, because it is your money that is in question here.
In this day and age, accepting credit cards as a form of payment for your business is an absolute must. For the average retail business, it is as easy as calling a merchant bank and requesting a merchant account. However, some businesses are classified as “High Risk” by processing institutions and are much more difficult to get a merchant account for and are typically more expensive.
A high-risk merchant is any merchant that has very poor credit and/or owns a business that operates in an industry that is known for having higher than average chargebacks and a higher chance of transactions being fraudulent. A few good examples of businesses that would be considered “High Risk” are as follows.
- Casino and poker sites
- Adult Services
- Online pharmacies
- VoIP companies
- Travel agencies
- Subscription-based businesses
The reason that processing banks are hard on businesses that are considered high risk is simple. If a business fails to meet its obligation to provide its customers with a service or if a business goes bankrupt and a customer demands their funds be returned to them, then the merchant bank is obligated to refund the customer out of their own pocket. All of the risks associated with processing payments are absorbed by the bank itself, and the bank just does not want to deal with that.
So, what options does a high-risk business have?
A business owner always has the option of not acquiring a high-risk merchant account and, thus, not accepting credit cards as a form of payment. Unfortunately, accepting credit cards as a form of payment is a must in order for a business to flourish. If you do not have the ability to accept a credit card, a customer is likely to just go to one of your competitors.
A more feasible option is to choose a merchant account service provider specializing in working with high-risk businesses. These professionals offer a complete range of high-risk merchant services, including high-risk credit card direct processing and high-risk e-check processing solutions. With their assistance, you can accept credit card payments in as little time as possible with a stable, safe solution with fair rates and favorable payment terms.
Setting up a merchant account is one of the wisest things you can do for the growth and expansion of your online business. After all, a merchant account is what makes it possible for you to process credit card payments on your website.
But how does the credit card processing system even work?
There is no reason why you should be familiar with the ins and outs of how the payment processing system works on your website, as your payment processor or acquirer will handle everything on your behalf. However, it is still a good idea for you to get to know the basics.
Understanding The Mechanism
Let’s try to understand how the card processing system works with an example. Keep in mind that these steps are similar for both low risk and high risk merchant accounts.
- A customer buys something worth $100 from your online store and pays with a credit card.
- The $100 amount will first be transferred to the payment gateway, where payment will be authorized with a small deduction (say $0.5).
- The ($99.5) amount will then be transferred to the appropriate processor and submitted to the card interchange after a further small deduction (e.g., $0.5).
- After the transaction is cleared at the interchange, the $99 amount will be transferred to the issuing bank with a further deduction (another $0.5). This is where the issuing bank will verify the flow of funds to the customer’s credit card.
- If the issuing bank approves the transaction, the $98.5 then reaches the processor at the acquiring bank.
- Once the payment is authorized by the acquiring bank, the bank deducts a small amount ($1) and the final amount of $97.5 gets deposited into the merchant’s account.
(Note: In the case of high risk merchant accounts, such as an online poker merchant account, the fees are almost always higher than those of low risk merchant accounts.)
Today, Online payments are exclusively made electronically, especially with the extensive use of credit and debit cards. So, if you still do not have a credit card processing solution on your website, you are losing out on a ton of customers.
Establishing a merchant account offshore is not a complex task anymore. While many high-risk businesses choose to open a merchant account offshore, not all accounts are exclusively created for high-risk merchants.
Companies in different industries establish accounts because the payment online processing option makes good business sense. The primary goal of any business is to have the most efficient payment processing solutions, whether the solution includes a merchant account offshore, domestic processing, or any combination thereof.
Business Benefits of a Merchant Account Offshore
- An offshore Merchant account diversifies payment processing and decreases risk factors associated with payments., this account offers substantial protection to businesses against the uncertainties in the global business world.
- Interchange rates vary under different jurisdictions. Therefore, it may actually be more affordable to process certain transactions through this account as compared to a domestic account.
- For companies doing international business, the foreign exchange rate of the currency is a major concern. This account can help a company in saving money on foreign currency exchange rates.
- Multicurrency processing. All these accounts can process and settle transactions in several currencies. Multicurrency processing helps in increasing sales by giving customers the option to pay in local currency.
- An account may offer several other business expansion advantages. Many countries give incentives and rewards to companies that establish a corporate presence under their jurisdiction.
- Certain high-risk businesses (such as OTC bitcoin trading desks) find it easier to process payments with an offshore high-risk merchant account than domestic.
- Businesses in the online Casino, Poker and online pharmacies have issues be approved onshore when as offshore bank maybe more accepting.
- An offshore bank account also offers unlimited processing volumes as a standard feature. This is particularly helpful to expand businesses rapidly.
International e-commerce and Offshore Merchant Accounts
In these times of international e-commerce and online business an offshore merchant can be a game change for an online business. The world has indeed becoming a global marketplace. Any international company is making a mistake if it is still thinking in terms of only national borders. International payment processing is crucial for companies that have a global customer base.
If your business falls in the ‘high risk’ category, you are likely to have your merchant account applications denied by banks and processors a couple of times. Can the solution to this problem be to set up a high risk offshore merchant account?
Well, yeah. Banking regulations are more lax in some jurisdictions, and some international financial institutions are more willing to work with high risk businesses as well. This means that enlisting offshore banking services can very well help your chances of getting a merchant account.
Here are some tips on how you can find the right offshore banking service provider.
Many offshore banking service providers specialize in working with high risk merchants; however, not all high risk merchant services providers work with foreign banks and processors. Many high risk merchant services providers work only with US-based companies, providing accounts only through US-based banks. Thus, before applying for an offshore account, you will want to confirm that the company you are considering partnering with works with businesses located in your country. This info may be provided on the provider’s website, or you may need to speak directly to their sales staff to receive confirmation.
High risk offshore merchant accounts are often more expensive than standard merchant accounts. What’s worse is that high risk merchant service providers know you are desperate for a merchant account, and some, though not all, will try to exploit your position by charging you as high as they can. It is therefore strongly recommended that you compare several quotes from different high risk merchant service providers before making a decision.
Having a high risk business does not mean that you cannot accept credit card transactions like any other business. Get your business back on track by finding a merchant account service provider that will partner you with the right acquiring banks.
The fast-paced and ever-developing online casino industry is growing in leaps and bounds and tends to offer huge possibilities for revenue and return. It is a lucrative market, sure. From a payment processing standpoint, however, online casinos are considered “high risk” as they fall into an area of legal ambiguity and involve high-ticket transactions as well as a higher potential for chargebacks and credit card frauds. No wonder why most acquiring banks and payment processors do not take a gamble at accepting online casino merchants accounts.
Why do I need a casino merchant account?
If you do most of your casino business on the internet or through mobile apps, you cannot afford not to have a online casino merchant account. After all, it is with a merchant account that you are able to accept and process credit card payments effectively and efficiently and establish your online casino’s reputation and credibility.
Let’s take a look at some other benefits setting up a casino merchant account can offer you:
- Needless to say, the most significant benefit of setting up a merchant account is that it gives you cost-effective and real-time credit card processing solutions.
- With a casino merchant account, you can also accept credit card payments and conduct transactions in different currencies.
- The secure SSL encrypted servers can help to protect your website against credit card scams and online fraud round the clock.
- In addition to allowing you to process credit cards, some merchant accounts also allow you to accept checks as a form of payment.
- Casino merchant accounts are also very easy to set up, making them appealing for online casinos with varying numbers of employees and services. The accounts can be created online, and many high risk merchant account service providers can approve your application within a few days.
- You will also get round the clock support services from your payment processor, so you can have all your questions answered in time.
Having a high risk merchant account set up and ready for your online casino can be very rewarding, but you ought to make sure you only turn to a trustworthy high risk merchant account provider for the job.
Although online poker is only legal in four states so far (i.e., Nevada, New Jersey, Delaware, and Pennsylvania), this fun and exciting card-based game attracts millions of players from around the country. You can’t deny it – whether it is Texas Hold’em, Omaha, Seven-Card Stud, Five-Card Draw or High/Low Chicago, that adrenaline rush of seeing the cards being dealt and hitting big when that river falls in your favour is second to none.
Having said that, if you are planning to set up your own poker website, you might find it hard to find a reliable credit card processing solution as the online gaming industry is considered “high risk.” High volume turnover, higher potential for chargebacks, and higher potential for money laundering are just some of the reasons why a processor might label an online gaming merchant as high risk.
Can offshore merchant accounts be the solution you need?
When you partner with a reputed high-risk merchant service provider who can match you with banks outside the U.S. that have fewer trading restrictions, you can begin processing payments and bets on your poker website within two weeks! You also get a lot of additional benefits such as fraud protection, chargeback mitigation tools, and 24/7 customer service. What’s more? With an online poker merchant account, you may even be able to accept payments in the world’s most traded currencies, such as US dollars, British pounds, euros, Japanese yens, Swiss francs, and more.
If you want your casino to online poker website to grow and receive a lot of traffic, as well as enjoy a good reputation, you will need a professional high-risk merchant services provider to help you on that journey.
With an increasing number of crypto OTC trading services providers in the market, how do you know which one is right for you? Here’s what you should look for when comparing your options:
- How does the service provider store their clients’ funds? Do they work with a licensed and regulated brokerage firm? Do they have any protective measures (such as ring-fencing all funds in the client’s sub-accounts) in place? The answers will determine whether your funds will stay safe and secure with them.
- Make sure you know the amount you will be charged to set up your OTC bitcoin trading account, as well as the amount you will be charged for each trade. Most reputed crypto OTC trading services providers offer account setup at no additional costs.
- How’s the sign-up process like? What are the requirements? Every good service provider should request relevant KYC documents to complete the merchant’s verification.
- What about customer support? Will they provide you with personalized support and assistance every step of the buying/selling process? Is it easy to get in touch with a representative of the company should you have any questions or problems? If it’s not, look elsewhere. A crypto OTC trading services provider that can’t be counted on to resolve your queries can’t be trusted for handling your funds as well.
- Once you selling your crypto position can you funds be easily wire out without extensive KYC or excuses.
- How long have they been in business? Don’t work with a service provider with less than five years of experience under their belt.
By taking these factors into account, you will be able to make a more informed decision when choosing your crypto OTC trading services provider.
If you are planning on buying or selling large quantities of Bitcoin (BTC) at once, you probably do not want your trading to be at the mercy of a traditional exchange. You want a trading route that protects you from the slippages as well as the risks of hacking and theft that come with conventional cryptocurrency exchanges.
Can over-the-counter (OTC) trading be that route for you?
Although a good majority of crypto market observers tend to swear by traditional (on-exchange) volumes as the key metric by which to measure Bitcoin trading activity, the over-the-counter market is an even larger underbelly that often goes unnoticed by anyone but those involved in it.
The term “OTC” is not unique to the realm of cryptocurrency. It exists in the world of traditional finance as well, and simply refers to a method where trading is done outside the periphery of the public eye, without the supervision of an exchange. In plain English, Crypto OTC trading is a service available to large-scale traders (high net-worth individuals or institutional traders) who want to get a faster settlement of large trades and quicker access to their funds than exchange-based transactions.
What’s the takeaway for you?
If you are a trader who wants to execute large orders of BTC quickly, conveniently, and privately, going OTC by using a trusted broker might be your safest bet. OTC Bitcoin trading offers you quicker trading times, ideal liquidity, price protection and anonymity, making this the absolute best option for buying and selling large quantities of cryptocurrency.