If you run a large business and want to expand it to overseas locations to attract international clients, you should establish a High-risk merchant account for yourself. If you’re new to this term and want to know more, you have come to the right place. This article will explore what a high-risk account is, who it is meant for and how it can help your business thrive.
High-Risk Merchant Accounts:
A high risk merchant account is a special account established to allow complex and multinational businesses to cope with the high-risk factors that come with them. Whether it is fraudulent payments or chargebacks, the high-risk merchant accounts help the company cope with such issues. To understand why a business needs to set up a high-risk account, we need to understand what a High-risk business is.
Why Are Some Businesses Specified as High-Risk Merchants?
Some businesses are proven to be more vulnerable to chargebacks and bad credit scores and are thus, universally designated as High-Risk merchants. These are the examples of industries regarded as High-risk merchants:
- Casinos, Gambling, or Gaming
- Telemarketing
- Pharmaceuticals, Nutraceuticals, and Online Drug Providers
- Adult Entertainment Industry and Dating Services
- Travel, Accommodations, and Ticket-booking Services
- Attorneys, Bail Bonding Services
- Subscription Services
- Credit Repair/Debt Reduction Counseling
The sales acquisition strategies to acquire leads can also determine whether the merchant should be considered high-risk or not. The more aggressive the sales strategies are, the more revenues you gain. And with higher revenues comes a higher risk of chargebacks, fraudulent payments, and credits.
Generally, the high-risk sales strategies include:
- E-Commerce sale
- Inbound call or infomercial
- Lead-based advertising
- Pay-per-action advertising
- Online Upsell tactics
- Outbound calling via call center
What are the Privileges of Having High-Risk Merchant Accounts?
1. Global Coverage
Unlike regular merchant accounts, which allow transactions only in the parent country, a high-risk merchant account has no restriction. A high-risk account will enable customers to transact money from different countries using various types of currencies. Thus, a high-risk merchant has more possibilities to globalize their business and gain international clientele.
2. High Chargeback Protection
A regular merchant account has a limited chargeback threshold. If exceeded, the account can face the risk of shutting down. While running a complex international business, you need to have adequate measures for chargeback management. A high-risk account has provisions to accept the liabilities that come with high-risk businesses, thus, helping them run smoothly.
3. Ability to Accept Payment Via Multiple Modes
A low-risk or regular merchant can only accept payments using a limited payment method. However, an international business has to rely on different modes of electronic payment for revenue generation and thus, cannot function properly with restrictions.
Thus, high-risk merchant accounts offer it the flexibility to accept revenues via a wide range of payment modes in exchange for a few. A high-risk account allows the business to:
- Receive recurring payments.
- Accept different credit cards.
- Allow net banking.
- Accept cryptocurrencies like Bitcoins etc.
4. No Limited Target Volume Caps
High-risk merchant accounts do not pose any limitation regarding the target volume. This means the customers using the services of the business can transact with them without any worry of exceeding the target volume. This feature allows the merchant to expand its business without any sales restriction and earn international clients.
5. Better Security Measures
As high-risk merchants are more prone to fraudulent charges, they need better security measures to keep their accounts and revenue safe. A high-risk account provides extensive multilayered security measures to keep the revenues protected and also to keep hackers out of the picture.
High-Risk Account Fees:
All the benefits of a reliable high-risk account come at an inevitable cost regarding processing charges and chargeback fees. These fees are standardized according to the services offered by the High-risk account. However, a few merchant accounts offer competitive rates for their tailored services for your business. They can even charge you up to a 15% additional rate as the service provider’s commission.
How to Find the Right High-Risk Merchant Accounts for your Business?
1. Offers Wide Currency Support
High-risk merchants catering to global customers need to collect revenue from different corners of the world. Thus, their account will be receiving numerous types of currencies from diverse countries.
While choosing a high-risk merchant for your business, you need to make sure that the service provider accepts a wide range of currencies and enables you to convert the revenue into the currency you prefer.
2. Focuses on Security
A complex, high-risk business has information and money streaming in its account from multiple customers residing in different countries. You would need customized solutions for keeping the customer’s data safe and your revenue protected.
When you choose a high-risk account for your business, make sure they offer high protection standards. They should provide multi-layered defense measures to prevent fraudsters from hacking into your account.
3. Offers Flexibility and Customization
Not all businesses can fit into a conventional merchant account plan. A high-risk account needs to provide flexibility to the merchant to negotiate a tailored solution for their revenue collection and account maintenance. Consider a service provider that offers shorter contracts if you don’t want to commit your business to a long-term merchant account contract.
4. Transparent and Upfront
The credibility of a high-risk account can be assessed by reviewing how transparent its services are. Before you choose a merchant account for your business, make sure you are delivered all the information upfront.
Check the testimonials provided by the other businesses the service provider has collaborated with. Pick the one with a proven track record. Thoroughly review the terms and regulations of the contract you are about to sign.
5. Provides Responsive Customer Assistance
Apart from a comprehensive solution for its banking needs, a high-risk merchant also needs additional services to help keep the business up and running. Make sure the merchant account service provider values services and offers always-on communication.
Choose the one that offers you expert customer assistance, troubleshooting, and maintenance solutions. You should be able to contact them regarding your online chat, email, and one-to-one phone call.
The Bottom Line:
A high-risk account is indispensable for large, multinational businesses. It can help you accept multiple modes of electronic payments without any restrictions regarding the target volume cap.
It will provide you with a payment processor that offers high-security measures to keep your revenue safe and facilitate the smooth running of your business. We hope this article has provided you with all the vital information you need to set up a high-risk account for your company.
