Being able to take credit cards as a mode of payment is one of the major decisive elements to determine the growth or nonsuccess of a business. Customers definitely love the ease that credit cards give and would typically refuse to do transactions with companies that do not provide a simple option of paying with their credit. This circumstance offers a big challenge for any business strategy or company that is labeled as high-risk. High-risk merchants would have it more difficult to obtain and keep merchant accounts because the level of risk is too high. This is where a payment processor, Tailored Pay, comes in handy.
Tailored Pay helps businesses in acquiring a high-risk merchant account in the fastest and most efficient way. But before you decide to obtain a high-risk merchant account, you need to know the basics first.
Must-Know Facts About Tailored Pay High-Risk Merchant Account
Characteristics Of A Business Considered As High-Risk
How are high-risk businesses classified? What is meant when the term “high risk” is used? Is it always the cause of a market crash? Fraud? In that sense, the answer will be either yes or no. It has been divided into two directions as a result of the fast advancement of technology. One in which everyday duties become easier, more efficient, and quick. On the other hand, the other branch is responsible for identifying flaws, challenges, and gaps in these technologies. As online transactions grow more efficient, they become riskier and more sensitive.
High-risk businesses include those that perform high-value transactions and cash returns online, those that operate in high-fraud areas, and those that do business in an unlawful manner. To put things into perspective, some of these shops sell adult items, guns, cigarettes, and cigars. These companies are considered high-risk due to “large” online transactions involved, which may be risky due to the fact that money is not always collected or services or products are not always provided. High-risk goods may be forbidden, leaving the business with massive debt. Due to the high value of the money involved in online transactions, fraud is a possibility. Moreover, multilevel marketing puts a company in danger.
Merchants engaged in high-risk business are always on the hunt for a supplier that is affiliated with a bank that welcomes merchants engaged in a high-risk business. For instance, Tailored Pay is a reputable company that offers payment processing solutions to a wide variety of industries. Once a company has selected the authorized provider to approve its bank statements, different limitations would apply due to the associated risks, such as lower processing limits, higher processing rates, and fewer processing options.
High-Risk Merchant Accounts Are Not At All Equal
Due to the increased risk associated with high-risk merchants, there is a multitude of terrible deals offered to them. Certain conditions and fees are so stringent that the expenses are just impractical. As shown by their terms and conditions, certain merchant account companies are just interested in making a fast profit from these accounts. However, other businesses focus on this highly profitable industry as well as consider their customers as partners.
Who Are Qualified For A High-Risk Merchant Account
Determining whether a business appears to fit in a high classification is a black and white statement. If the business classification you are working with seems to fall in a high-risk category, it is highly suggested that you will apply for a high-risk merchant account to be your viable course of action.
Chargebacks And Fraudulent Orders Are Common
Businesses that have a high rate of fraud incidents and chargebacks are automatically classified as high-risk. This is determined by the business relying on the pattern for customers in the industry, and you are not exempted. If a merchant have a high tendency for unlawful or fraudulent orders or chargebacks, a merchant provider may want more revenue and assurance from a high-risk merchant account.
USA Offshore Businesses With Markets
Offshore businesses that are trying to enter the US market may encounter certain difficulties. The issue is mostly a result of its country of origin’s banking laws. If they would not adhere to the standards of the merchant account provider, the account will be classified as high-risk.
Suspicious Legality
When the legitimacy of a product or service is not apparent, the account becomes risky. Certain items are lawful in certain jurisdictions but not in other places. Businesses operating in is deemed as the ‘grey area’ must search for providers who will meet their requirements. If they choose a business and subsequently change their mind, it might disrupt operations.
Personal Credit Issues
Most, if not all, credit card processors will have their clients categorized as high-risk if they have bad personal credit rating. Their claim is that the specific credit will have a big impact on the business, requiring additional costs to ensure its safety. It is important to seek proprietors who are in this situation. They could be able to negotiate better deals, but this does not elevate them to the level of their credit scores.
Higher Ticket Items May Be An Issue
Businesses that offer high-ticket products risk being classified as high-risk. B2B companies that supply a broad range of contract services may face similar challenges. Moreover, businesses that often sell things at a higher price than the typical ticket can potentially raise red flags. The merchant account provider may require more information or documentation to ensure that the business is abiding by the merchant provider’s terms and conditions. Massive chargebacks in the transactions department may need some explanation and documentation.
The majority of businesses may qualify for some credit card processing, although they are originally classified as high-risk. They can, however, strive for their way up in order to have a better status by providing real income and avoiding unjustified client complaints. In essence, preventing fraudulent purchases and chargebacks will be very difficult. Both of these indicators point to substandard service and product quality and could force a provider to stop the operations if the numbers continue to trend in the wrong direction.
Conclusion
If you are a proprietor and your business has been classified as high-risk or difficult to place, it is highly recommended to ask for assistance from Tailored Pay. Tailored Pay specializes in high-risk card processing for a diverse variety of businesses. They offer a simplified solution for difficult-to-place businesses through their extensive worldwide network of banking as well as processing partners. Do not fret if your application was denied by other banks. Contact them now to learn how they can help your company grow and succeed.