If a business is categorized as high risk, it can be difficult for the merchant to locate a reputable, secure, and fair high risk credit card processing services provider. Even if you could find one, you will be charged higher rates along with several undesirable terms from the online payment gateway processor. Have you ever thought why a high risk virtual terminal merchant account service costs so high? Or have you thought of what steps you can take to pay less for your high risk credit card processing services? Well, keep reading to get all these questions answered for you here…
Costs of High Risk Credit Card Processing Services:
A high risk credit card processing services provider will not accept to offer you the service if they think your business a big threat of losing money. They will avoid your request altogether and will not accept anyone from your industry. Contrarily, if they are ready to accept your request, they will raise the costs and tack on heavy terms in order to balance out the risks your business pose. This is why the high risk credit card processing services are so expensive.
Following are some reasons why your virtual terminal merchant account provider is considering your business a high risk one:
Borderline illegal business
Dubious sales and marketing strategies
Chances of legal and financial liability
Industry famous for a higher number of chargebacks and fraud incidents
Obtaining a High Risk Merchant Account:
As a pharmacy merchant, if you have been denied a merchant account by several credit card processors, don’t give up. There are several service providers who specialize in high risk merchant account services. So, these companies are most likely to accept you, but they may provide the services at higher rates.
Here are the tips to follow when searching for high risk credit card processing services:
Never try to outsmart your processor:
If you are of the idea that you can outsmart your processors by not completely revealing the products and/or services you sell, you should reconsider. The high risk merchant account providers can find out will definitely find out that you are a high risk merchant by doing an audit, which will be frustrating and expensive on your pockets. So, always try to be as honest as possible with your provider. Even if one processor denies you, you can still go out and search for another processor who will work with you. Yes, there are several processors who will accept you. So, keep trying!
Keep capital resources on your hand:
One of the easiest ways to make the payment processing provider accept you is to show them that you are well-capitalized. Such resources may include:
If you have enough resources, acquiring banks, as well as underwriters, will be ready to provide credit card processing services as the productive assets are the signs that your business is well-funded and it can be able to absorb any loss.
Submit your processing history:
If you do not have substantial capital resources on hand, you will have to submit your processing history to your credit card processing services provider. This is to show how you have processed your payments in the past. Even if you have been dropped by a low risk processor previously, don’t be worried about it.
They would have done it because they might have felt that your business was too risky for them to handle and not due to the number of chargebacks and fraudulent activities. So, whenever you are approaching a new provider, you must be willing to prove them that your account was not suspended due to illegal stuff.
Don’t agree with preset limits:
More often, credit card processors will give high risk businesses with a preset limit. This limit is to take control of the degree of transactions they should process. While this is not a big thing for new businesses, after the business picks up, you will start processing a higher degree of transactions. At these times, your processor will charge you with a penalty for exceeding the preset limits. Therefore, when you search for a processor, agree with the one who offers unlimited transaction volumes.
Negotiate very often:
Let’s imagine you don’t have any processing history. In such cases, your account will be considered riskier than other merchants meaning that you will be charged more and will be highly restrictive. While this may be acceptable when are just starting out, you can re-negotiate the rates and terms with your processor when you have got at least three months of history to analyze and review.
Find the right high credit card processing services provider:
By finding the credit card processing services provider who works specifically with high risk businesses, you can not only build your reputation but you can also reduce the incidences of chargebacks and fraud.
For more information on the credit card processing services and setting up of secure payment gateways and virtual terminals, talk to our team of experts today!