With so many third party merchant providers to choose from, you have to be careful. There are what’s called high risk credit card processing companies, and some business owners know the risks and still use them. Why? Well, a big part of it can be about the fees that are charged. You don’t want to choose a high risk company though because those risks can manifest themselves into all kinds of problems for your business.
Importance of High Risk Company
You don’t want the personal and financial information of your customers compromised. You don’t want customers steering clear of doing business with you either because they catch wind that you are doing business with a risky merchant provider. You also don’t want your payment system going down for any reason, and well, the list goes on and on. A risky merchant account can compromise the integrity of your business, and that would be horrible.
Then there is the other side of high risk CBD Merchant Account, and it’s all about high risk business owners. Yes, third party credit card processing companies can indeed consider your business to be high risk and choose not to provide services to you. That isn’t good because that can make you feel like you then have no choice but to do business with merchant providers that are high risk themselves as mentioned earlier.
At the very least, that puts you doing business with a merchant provider that charged more or that provides lackluster customer service, or does it? It can for sure, but you have many choices when looking at credit card processing companies. Perhaps it is first a good idea to consider what might cause your business to be labeled high risk. What are some of the factors that might find you classified as high risk by these merchant providers?
It can certainly have everything to do with the type of business that you run. For example, many subscription based services often fall into this category. Adult products and services, multilevel marketing and timeshares are also good examples. Do you do business within an industry that is considered high risk by the merchant providers?
They will certainly tell you if you do. Not all of the merchant providers operate according to the same standards, however, as I have made abundantly clear. Furthermore, it’s not just about the type of industry. It is also about other criteria. For example, does your business deal in multiple currencies? Doesn’t it sound a little unfair that this could classify your merchant account to be at high risk?
Another factor is if your transactions are always quite large. In other words, it’s a red flag to them sometimes if you handle enormous transactions on average than what their own averages are for a company. Dealing with multiple currency types has already been mentioned, but let’s talk more about international business. Do you do business in countries that are known for questionable transactions and even illegal activities?
That can also be a red flag for these merchant providers, meaning that your merchant account with them would be considered high risk. Now, let’s look at some more determining factors. Are you a new business? That alone can classify you as a high risk, but again, it just depends on the company.
Your charge back ratio is important, and many of the red flag reasons mentioned above have much to do with the charge back factor, too. If your business has a high charge back rate, that is of course not going to be something that third party credit card processing companies like very much at all.
Have you done business with any of the companies before? If your business has a bad track record, or your merchant account was terminated for some reason, that is going to reflect poorly on you. It is something that could surely classify your business as high risk.
What is your credit like?
If you have bad credit, that can also make it to where these merchant companies consider you high risk. My goodness, how many land mines are there? It pays to know your stuff so that you end up doing business with the best third party merchant company. You will have to pick one according to the guidelines set forth, but you don’t want to sell yourself short.
What you need to do now is think about everything that has been said. Where does your business fit in? Perhaps you clear most if not all of the hurdles. Remember that not every company is going to consider the factors mentioned above to be deal breakers. They could simply label you high risk and charge you more, or they may not do anything at all. You have to get to know the market better and make the best decision for your business.