- May 21, 2018
- Posted by: ipaytotal
- Category: Ipaytotal Blog category
The Best High Risk Merchant Account Provider
Just about everyone in business these days have an urge to accept credit cards. Finding a reputable merchant account provider to process those credit card transactions for you can be a pretty challenge for any business, but it’s even harder if you’re a high-risk merchant.
What is a High-risk merchant?
There are many factors that defines a high risk merchant. The vastness of a High risk e-commerce is ever changing, ever evolving. With years of expertise dealing in e-commerce businesses with high risk merchant accounts, we’ve remained up to date with all the rules and regulations. When banks label a business high risk, it can mean several things:
- A startup business with less than 6 months or no credit card processing history
- An industry exposed to high rates of chargebacks and refunds
- High value ticket size.
- Subscription-based products or services, such as online dating or magazines
- A merchant terminated by a bank or is in the MATCH or TMF list.
- Merchant having previous history of bankruptcy
- High volume businesses, such as nutraceuticals
- High average ticket amount:-This is another instance when more money for the merchant is considered high risk for acquiring banks. If your average ticket size is hundreds or even thousands of dollars, expect your business to be regarded as a risky investment by merchant service providers.
- A country or specific region a merchant is targeting
- Pharmaceuticals:-Talking about controlled substances and medications that can have an irreversible effect if misused, it makes sense to find pharmacies on this list. Additionally, one of the biggest markets in this category to come under fire recently is the CBD industry. Although many states are legalizing the medicinal and recreational use of marijuana, financial institutions that are backed by the federal government aren’t so comfortable to hand over merchant account to this industry.
- Gaming:-Gaming is an industry that is notorious for fraud and chargebacks
- Firearms:- While there are fraud and legal matters to consider in this industry, there is also a risk by association. Banks are often criticized and penalized for doing business with these types of merchants.
- Adult entertainment:-Finding a merchant account for adult content is also considered risky business. These businesses can be anything from pornography distribution to dating websites.
- Travel and Lodging:-Unfortunately, in the hospitality industry, hotels and travel agencies are also flagged as high-risk merchant accounts because there are a lot of chargebacks and frauds initiated by customers.
- All card-not-present transactions:-Last but not least, we have card-not-present transactions or CNP for short. CNP transactions include businesses where the physical payment card is not present at the point of purchase. Generally, these are all Mail-Order/Telephone-Order (MOTO) transactions. However, in the digital age, this also includes e-commerce transactions. So even if you own a perfectly legal online ecommerce store that sells products, you can be flagged as a high-risk business.
STEPS TO CONSIDER BEFORE APPLYING FOR A MERCHANT ACCOUNT?
Now since you have a basic idea of what a high-risk merchant account is ,let’s study a little deeper and examine how banks determine your business’ risk level.
Its very much similar like applying for a loan.When a business owner applies for a merchant account, there is an underwriting process the merchant account provider will go through to estimate the risk of adding your account to their portfolio. Some of the points taken into consideration when applying for a merchant account are:
- Your personal credit history
- Company financials
- Number of years in business
- Merchant account history such as if you ever had a merchant account before. If so, do you have a history of chargebacks and have you been blacklisted on the MATCH list or Terminated Merchant File (TMF). Are you in good standing?
- Type of business or merchant category code
We Are a Full Service High Risk Payments Provider
We at IpayTotal Ltd do everything we can to stay ahead of our competitors, including offering the most aggressive pricing, the best services, and the best support and customer experience in the business. Our merchants are our top priority.
Customised High Risk Merchant Solutions
Every legal business should get the opportunity to accept payments online.IPaytotal is a merchant account provider that specialises in serving high risk business types. The organization’s services and products consist of point-of sale solutions, an online payment gateway and virtual terminal, fraud prevention and MOTO/POS. IPaytotal offers a dedicated account representative to all new retailers for the life span of the account. We have established relationships with various processors. Few of these processing companies may onboard merchants from select high risk industries. High-risk credit card processing can be tricky, but it’s not a death sentence for your business. Running any business these days more or less requires that you give your customers the option of paying with credit or debit cards. If you’re an eCommerce entrepreneur, credit/debit cards are just about your only option for getting paid. While it would be nice if credit card processors treats all businesses equally, the fact is that they don’t. Larger, high-volume businesses receive lower processing rates and often get more generous contract terms. Businesses are also treated differently based on the degree of financial risk they present to their processor. All processors will carefully judge your business to determine whether you fall into the “high-risk” category.
Get pre-approved in as little as 3 hours for difficult to obtain high risk merchant accounts – our team of experts say yes to virtually any business type, business model, and even those restricted product types – all through Ipaytotal’s high risk payment gateway .
I’m a High Risk Merchant, What are My Options?
If your business falls into one of the high-risk categories we have already mentioned above, that you still have a chance to obtain a High Risk merchant account. However, your rates and terms of your contract may be less desirable in comparison to your low-risk counterparts.
The good news is, there are a lot of merchant service providers that specialize in high-risk merchant accounts.Many merchant processors openly advertise their standard, low-risk merchant rates, high-risk account fees are usually less transparent because there are more variables to take into consideration. However, generally speaking, high-risk merchants can expect to pay anywhere from one to two percent more per transaction.
Additionally, if you’re deemed as a high-risk business, your account provider will likely require you to keep a reserve. There are three types of reserve accounts you can expect from your account provider, and they are:
- Rolling Reserve:- A rolling reserve is a risk management strategy the acquiring bank uses to protect themselves from potential fraud, chargebacks, or other incidents where the acquirer may lose money. Based on the terms of your merchant agreement, the payment provider will withhold a percentage of your daily revenue for a specified term, and then gradually release the funds.
- Up-Front Reserve:- If you’re a new business or have other less than ideal qualifying factors, some High Risk Merchant Account providers will require starting with an up-front reserve. Based on expected transaction volume, an up-front reserve is the amount of money that must be placed in escrow at the start of the merchant agreement — or allow the processor to withhold 100 percent of credit card funds until the reserve balance is met.
- Capped or Fixed Reserve:-A fixed reserve is when the acquirer withholds a percentage of every transaction until the reserve reaches the cap agreed upon in the merchant agreement. Unlike a rolling reserve where the acquirer takes a portion of every sale indefinitely, in this model, once the cap is reached the acquirer will not take any additional funds. However, if the processor needs to withdraw from the reserve for any reason, the withholding percentage will start in again until the cap balance is replenished.
One last thing to keep in mind,due to the nature of your business which is considered a High Risk, you may also be susceptible to account freeze. During this freeze, you cannot continue to process credit or debit cards until the hold is lifted.
If there’s suspicious activity with your merchant account, a payment processor may temporarily freeze your account to analyze your processing habits and decide whether or not you’re operating within the terms of your agreement or are in breach of contract.While account freezes may be unavoidable from time-to-time, the best way to avoid termination is to be honest on your merchant application. Be upfront about the types of products and services you offer and your expectations for credit card volume.
How We Can Help
iPaytotal, in addition to having significant experience working with high risk merchants, also maintains positive reputations among merchants and is known to offer fair pricing and quality customer support. Based in London and United States, iPaytotal is a merchant account provider that specialises in serving high risk business types. The company’s products and services include point-of-sale solutions, an online payment gateway and virtual terminal, fraud prevention and MOTO/POS. iPaytotal provides a dedicated account representative to all new merchants for the life of the account.
It’s hard to find quality credit card processors for high risk business types. A lot of merchant account providers will decline to process transactions for high risk businesses, which restricts the options that are accessible to hard-to-place merchants i.e. High Risk Merchant Account. Perhaps, with only a few processors to choose from, merchants can find themselves simply signing up with the first provider they stumble upon that will accept them instead of shopping around and looking for reputable, experienced processors that specialise in high risk merchant accounts. This leads to headaches down the road, as high risk merchants are especially vulnerable to charge-backs, the fund holds, excessively high rates and various other parameters.
iPaytotal, in addition to having significant experience working with high risk merchants, also maintains positive reputations among merchants and is known to offer fair pricing and quality customer support. As always, the best way to ensure that you receive a great deal on your high risk merchant account is to contact multiple providers and compare their pricing and service packages.
Based in London, iPaytotal is a merchant account provider that specialises in serving high risk business types. The company’s products and services include point-of-sale solutions, an online payment gateway and virtual terminal, fraud prevention and MOTO/POS. iPaytotal provides a dedicated account representative to all new merchants for the life of the account. We have not received any negative complaints on consumer forums, and we customise our pricing according to each merchant’s business type and processing history.
To know more just fill out our short form and we’ll get back to you and help you save time, give a brief comparison with several multiple merchant account providers, save money i.e., find the best pricing with respect to your particular situation, even if you’ve been declined payment processing before.