A Business Owner’s Guide to High-Risk Merchant Accounts
Did you know that there are over 600,000 new businesses across the United States each year? However, many of these companies fail within the first few years.
One of the most important responsibilities that business owners have is optimizing the way they are customers can pay for their products or services.
This is especially true for companies that operate online. However, some businesses are more at risk than others when it comes to vulnerability to hackers.
Let’s take a look at everything you need to know about high risk merchant accounts.
So, What Is a High Risk Merchant Account?
In short, it is an account that allows a business to accept credit and debit card payments, even though they may be more likely to experience fraud.
The extra level of security is worth the cost for many businesses. Without one in place, it is highly likely that the business in question will experience a crippling cyberattack.
How Does This Type of Merchant Account Work?
There are a few key things that make high risk merchant accounts different from regular ones.
The first is that they often come with higher fees. This is because the account provider is taking on more of a risk by working with a company that is more likely to experience fraud.
High risk merchant accounts also have stricter limits in place. This is to protect the account provider from potential losses.
Why Would My Business Need a High Risk Merchant Account?
There are a number of reasons why your business might be considered high risk. The most common reason is that you operate in an industry that is known to be targeted by hackers. This includes industries like online gaming, dating, and adult entertainment.
The finance, healthcare, and tech spaces also have substantial payment gateway risks.
Another reason your business might be considered high risk is if you have a history of chargebacks.
Chargebacks happen when a customer disputes a charge on their credit card statement. If this happens too often, it can be a sign to merchant account providers that your business is not taking proper steps to prevent fraud.
It’s essential to consider the impact that a data breach can have on your audience. Not only will they have to deal with the consequences, but it is also likely they will lose trust in your brand. Situations like these can be highly difficult or even impossible to recover from.
This is true even if it happens only once.
What Are the Benefits of Having a High Risk Merchant Account?
Despite the higher fees and stricter limits, there are still many benefits to having a high risk merchant account.
The most obvious benefit is that it will allow you to continue to accept credit and debit card payments. This is crucial for businesses that rely on online sales.
Another benefit is that it can help you to build trust with your customers. Having a high risk merchant account shows that you are serious about protecting your customers’ data. This can go a long way in building customer loyalty.
A high risk merchant account can also give you access to features that might not be available with a regular account. For example, you might be able to get a higher credit limit or a more flexible payment schedule.
How Do I Find the Best High Risk Merchant Account?
As you might guess, you’ll want to find a provider that has a lot of experience working with businesses in your industry.
This way, you can be sure that they understand the unique risks that your business faces. Another important consideration is fees. As we mentioned, high risk merchant accounts often come with higher fees.
However, this doesn’t mean that you should just accept the first offer that you receive. Be sure to shop around and compare fees from different providers before making a decision.
It’s also essential to make sure that the provider you choose offers excellent customer support. This is especially crucial if you’re not very familiar with merchant accounts.
You’ll want to be able to get help quickly if you have any questions or run into any problems.
Your provider should always be compliant with Payment Card Industry (PCI) standards. In context, this means that the provider stores, processes, or transmits cardholder data in a secure environment.
Otherwise, your provider could be held liable in the event of a data breach. This is something that you want to avoid at all costs.
Of course, you should always check the past reputation of your potential merchant account. Seeing what others have had to say is a great way to gain insight into the type of experience that you can anticipate from working with them.
This is one of the most important responsibilities you have, so be sure that you keep it in mind.
Finally, you should check out the features that they offer. Not all merchant accounts are created equal, and it’s crucial that you find one that works for your needs. This resource is a great place to start — you can check it out now.
High Risk Merchant Accounts Are Crucial
If you don’t leverage the utility that high risk merchant accounts provide, you’re putting your business at a disadvantage (as well as unnecessary risk). Be sure that you keep the above information in mind so that you can make the decision that is best for your company.
Looking for other useful articles like this one? Our blog has plenty of info that can help you out in the future.