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Insight into High-Risk Credit Card Processing

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In most cases, people looking to start a business or have recently jumped into entrepreneurial waters have never heard of high-risk credit card processing. Business owners that don’t fit into the “high-risk” category never learn about it because they don’t have to. 

If you are in this category, this issue can present a lot of headaches. However, you can find what you’re looking for and streamline your business operations with ease with the proper knowledge and information. To help you with these issues, we’ve decided to give you the most important insights about high-risk accounts. 

Don’t worry – we will keep it simple and give you only the crucial information you need to know. 

Why is your business “high-risk?” 

Different associations that handle payment processing define certain industries and business models as risky. In a lot of cases, these risky models are online businesses. Some typical examples that fit into this category are gaming, alternative medicine, gambling, telemarketing, etc. 

In general, these businesses have more chargebacks compared to typical merchants. That’s why all their transactions and activities are analyzed thoroughly by payment platforms before they decide whether to work with them. 

Because of these reasons, you need to find a specialized high-risk processing service with the experience and the knowledge to help you in your specialized market while providing all the necessary security measures. 

Characteristics of high-risk payment processors 

 

These payment processing providers accept greater liability because of the higher risk. Risk calculation requires more complex actions. Subsequently, it needs better fraud management. 

As a merchant, you’ll need to choose a processor with dedicated teams that monitor transactions and use tools that recognize suspicious activities. They also provide tools to their customers, allowing them to keep healthy accounts over a long period. 

We mentioned that high-risk businesses often have more chargebacks. That’s why it’s essential to find payment providers that provide processing solutions with the ability to prevent fraud exposure and the risk of accounts being terminated due to chargebacks. 

Fees high-risk merchants can expect 

Businesses with high risk can expect higher fees, which has been a standard for a long time. However, new processing providers rely on new tech, including analytics tools, machine learning, and AI, so you can find many flexible solutions today without high fees. 

On average, you will have to pay around 1% more per single transaction as a high-risk merchant. Some processing providers will also require long-term contracts, added chargeback fees, and tiered pricing. 

However, what’s encouraging today is that more and more niche credit card processing companies specialize in high-risk industries. For example, there are a lot of brand new niche processors that work in emerging sectors and offer convenient terms: 

  • CBD industry
  • Marijuana industry
  • Kratom industry 

Choosing a payment processor: things to consider 

As you might know, there are a lot of high-risk payment processors to choose from. To find the best possible option, make sure to consider these things: 

Your business model 

Find a processor that is familiar with your business model and understands all the necessary specifics. If possible, find a provider specializing in your industry to get the best value from their service. 

Level of security 

Since your business is likely to have more fraudulent behavior and chargebacks, it’s crucial to find a processor with multilayered security and chargeback prevention measures in place. That includes security tools, AI detection, real-time processing, automated notifications, and so on. 

Experience and expertise 

Check how long the company is active, how much experience they have, and whether they work in your market. On top of that, it’s always best to look for players who work in niche industries. These people will understand all the ins and outs of your business and your market. 

Transparency 

Look to work with companies that have clear pricing structures. They need to tell you about all of the costs without hiding any fees. If you don’t get precise pricing information, it’s best to look for another partner. 

Solutions

Your payment processor should give you things like multiple accounts, payment customization, versatile APIs, reliability, easy use, and so on. It is all made possible through modern technology that makes payment processing simple, easy, and transparent. 

Level of support 

When talking with a potential service, see how much they are willing to explain things and accommodate your needs. It’s an ongoing partnership, and you need to have a reliable company by your side that can help you with issues and help you achieve different payment scenarios for your business needs. 

Conclusion 

Establishing effective payment gateways for your business is crucial. Take the time to find a reliable processing service that will fit in with your needs. Don’t make a quick decision as you might end up stuck with poor service for a long time, which will affect your whole business.

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