What You Should Know When Applying for a High-Risk Merchant Account?

As a high-risk eCommerce entrepreneur, can you still obtain a merchant account to accept credit or debit card payments from customers?

Before we answer that, let’s understand why your business may be considered high risk in the first place.

Your eCommerce business may get tagged “high risk” by banks and credit card processors due to the following reasons:

●      You work in an industry that has historically shown a high chargeback rate or outright fraud.

●      You are an offshore eCommerce business primarily selling to customers in the U.S.

●      Your products or services are of questionable legality — for example, CBD or online casinos.

●      You have a low personal credit score.

●      Your eCommerce business has high average ticket sales.

The question still arises: Can you obtain a merchant account?

While it is true that being labeled “high risk” complicates your ability to access certain business essentials, including credit card processing, you can most certainly obtain a merchant account. All you have to do is know where to go for the expert advice and guidance needed, so you and your eCommerce business are safe from excessive expenses often associated with high-risk merchant accounts.

Banks and other financial institutions will either simply refuse to approve you for a merchant account or charge you outrageously high fees and rates. However, working with an expert in high-risk merchant accounts can help you obtain a cost-effective merchant account solution for your eCommerce business.

5 points to consider when selecting the best high-risk merchant account

1.    Your merchant account application needs to be handled by a high-risk professional expert.

2.    Your high-risk merchant account processor should have experience with merchants in your business industry.

3.    Your high-risk merchant account processor should have access to numerous credit sources, including more liberal banks and offshore options.

4.    If your eCommerce business has to be taken to offshore jurisdiction, your high-risk merchant account processor should work on getting you the lowest prices available.

5.    All expenses related to setting up your high-risk merchant account should be disclosed before the contract signing.

3 insider tips to ensure approval

1.    If you have a low personal credit score, be honest with your high-risk merchant account processor and disclose any past financial challenges. Doing so will online improve your credibility and remove one more barrier.

2.    Be open to offshore banking services as they can sometimes offer you the best high-risk merchant account solution.

3.    Shop around for a credit card processor with expert knowledge in high-risk merchant account approval — and don’t be afraid to ask questions. The more informed you are about the process, the better your chances of finding an excellent high-risk merchant account processor.

Running a high-risk eCommerce business does not mean that you can get by with a payment service provider (PSP) such as PayPal. If you want to improve your conversions and sales, accepting credit/debit cards is necessary. Although you may have to do a little more work in setting up your merchant account and accepting credit card payments from your customers, that is something you cannot simply ignore. So, do your “due diligence,” shop around, and ask questions to find a high-risk merchant account processor.