No doubt it is credit that makes the businesses world go around these days. But some businesses find it a little difficult to secure the right tools and necessary support to begin accepting credit card payments because they or their industry categories have been labeled as “high risk.”
It can be shocking to realize your business is considered“high risk”, whether it’s a startup or an established company. And many often ask “What is a high risk merchant account?” And what can make my business be termed as such?”
High risk Merchants oftengo into panic for the fear that their businesses will be no more. But this is no reason to worry; it only means you’ll have to be a bit more creative to find the right processor and technology you needto start processing payments.
But first you need to understand what a high risk account is?
What are high risk accounts?
These are accounts that major credit card companies like Visa and MasterCard have branded as prone to high chargeback rates—as a result, the retailer risks losing both the product and sale. And as we all know, chargebacks can be very costly –both forthe processing bank and the business.
However, the cost of processing chargebacks isn’t Visa and MasterCard’s main concern, the sticking point is the fact that exceeding some thresholds could lead to the downfall of a business. Here’s a list of industries considered high risk.
Businesses that mainly operate on the web and lack a storefront are usually considered high risk.
Timeshares, health clubs, diet programs, magazine subscription services and telemarketing programs are all labeled high risk.
3) Counseling services
All forms of counseling including financial, psychic, dietary, weight training services providers and any othersare considered high risk.
4) Home-based businesses
Businesses owners that workfrom home–e.g. salesof any product, resume writers and marketing consultants are generally labeled ashigh risk.
All the above and basically any business that’s not mainstream e.g. used car dealers, bail bonds and sport odd makers are all viewed as high risk. Be sure to confirm with your specific provider if they categorize your business is high risk.
Electronic payments expert, Blair Thomas, co-founded eMerchantBroker in 2010. His passions include writing/producing music, and travel. eMerchantBroker is America’s No.1 High Risk Merchant Account Companyserving both traditional and high-risk merchants.