A high-risk credit card is used to process payments for businesses considered highly risky to the banks. High-risk businesses are more exposed to chargebacks; thus, they pay more for merchant services. Some of the factors that make your business a high risk are your payment processing history, chargeback ratio, and returns.
Getting a high-risk card payment processor with a good reputation is quite challenging, but it will streamline your business processes. The processor keeps your money secured and improves your reputation in the industry. Some of the high-risk business models include adult entertainment, gambling, telemarketing, forex, pharmacy, travel, among others.
Factors to consider when choosing a high-risk payment processor
- Technology; You should consider whether your potential payment processor offers multiple accounts. Also, it would help if you asked for the APIs of the payment platforms so that you have ultimate control over the setup and payment process. It would help if you chose a user-friendly and fast boarding payment processor with almost zero surprises and downtimes.
- Responsive support; You will need to feel taken care of if issues arise concerning the payments on your website. Ensure that your payment processor guarantees that it will address every problem that comes about.
- Transparent pricing; The structure of pricing can be found on your prospective payment processor’s website. Analyze its cost to your business and ensure there are no extra fees. Always bear in mind that your revenue will increase with a decrease in rates.
- Accepted business models; Before opting for a specific high-risk payment processor, ensure that it is compatible with the business models that your business operates in. Also, you should check out the countries that your payment processor supports.
- Security; Some high-risk merchants generate fraud attempts and more chargebacks, and you will need a much reliable chargeback prevention system. The system should also have a multilayered security approach. Always check for AI-based fraud checks, real-time notifications, and anti-fraud tools before opting for a high-risk payment processor.
- Flexibility; An ideal high-risk payment processor should allow you to implement varying payment scenes that go hand-in-hand with your business needs. Ensure that every payment form element is customizable.
- Security indicators; Your payment processor should follow strict security guidelines. It should also provide anti-fraud tools to keep your business out of reach of fraudsters.
- Expertise; You should consider the duration your prospective payment processor has been on the market. Always choose a processor that is experienced in high-risk merchant accounts.
Pros and cons of high-risk payment processing
Pros
- As a high-risk merchant, you can access large markets by accepting multiple currencies’ transactions. You can then re-sell these currencies to clients in low-risk countries.
- With higher possibilities of selling more products, your chances of earning extra money increase, thus increasing your profits.
- You can also sell products that are disallowed by a low-risk merchant account. This gives room for long-term business growth.
Con
- You will pay higher processing fees and rates. Also, some banks may request a reserve since the business is at high risk.
Conclusion
Several reasons make your business high-risk. Setting up a high-risk merchant account via a reputable payment processor may simplify your payment processes.