Credit Card Processing: Can High Risk Businesses Get a Merchant Account?

[sburke]

Is your business considered high risk? And can you still get a merchant account?

In credit card processing, there are many different reasons why a business may be considered high risk.

- First, it may be the actual business industry that has been tagged "high risk", such as travel, multi-level marketing (MLM), e-commerce, aggregators or collection agencies.

- Second, the reason may simply be the business volume that places a business in the high risk category.

- And third, it may be a reflection of the business or the business owner's credit history.

The question still arises: Can High Risk Merchants Obtain a Merchant Account?

The answer is YES. But you have to know where to go for the expert advice and guidance needed so you and your business are safe from excessive expenses often associated with high risk merchant accounts.

Working with an expert in high risk merchant accounts is critical to the success of obtaining the best merchant account solution for your business.

5 Points to Consider When Selecting the Best Merchant Account for Your High Risk Business:

- Your application needs to be handled by a high risk professional expert
- Your high risk merchant account processor should have experience with merchants in your business industry
- The high risk merchant account processor needs to have access to numerous credit sources - including more liberal banks and offshore options
- If your business does have to be taken offshore, your high risk experts need to work on getting the lowest rate available
- All rates should be disclosed prior to contract with the high risk credit card processing company

3 Insider Tips To Ensure Approval for a High Risk Business Merchant Account:

- Do you have a poor credit rating? Be honest about disclosing any past financial challenges. Acknowledging previous liens, bankruptcies, judgments, etc. will only improve your credibility and alleviate one more barrier.
- Be open to offshore options as sometimes they can offer your business the best merchant account solution.
- Shop around for a credit card processor that has expert knowledge in high risk merchant account approval - and don't be afraid to ask questions. The more you educate yourself in the process, the more you will recognize a good high risk merchant account processor giving you intelligent, experienced answers to your questions.

Operating a high-risk business does not exclude you from being able to process credit cards. Like any business, you want to provide your customers with as many non-cash payment options as possible. It is statistically proven that accepting credit cards help generate revenues and stimulate impulse purchases.

Owning a high risk business doesn't mean you won't be able to open a merchant account. It does mean, however, that you may have to do a little more in setting one up that is right for your business. Do your "due diligence", shop around and ask questions to find a credit card processing company that specializes in high risk and offshore merchant accounts and will offer their expertise to businesses who fall into the high risk category.

Maxx Business Solutions President, Scott Burke is committed to making the merchant experience a pleasure for you. MAXX works as a trusted partner in merchant account credit card processing and strives to provide merchants - whether they are high risk merchants or have bad credit history - with the best support, the best rates, and the best service in the industry. Visit cmscreditcards for more information.

[john82]

Good post, I would rather consider a stable and reputed company for high risk business like charge.com, chronopay.com.

[warrensway]

I agree with the above poster. It is definitely something I will look up for you and get to you with though.

[kiberlain]

For some industries, merchant accounts can be more difficult to obtain as they are thought to be a high risk by the merchant account provider. Such industries include:

• Replica Products • Dating • Telemarketing • Adult • Multi-Level Marking • Cell Phone • Auctions • Travel • Pharmacy

Banks and third party merchant account providers consider these industries a higher risk due to a higher level of charge backs, returns/refunds and credit card fraud. As a result of the high risk associated for the provider of the merchant account, there are higher rates associated with merchant accounts.
It can be difficult to obtain a high risk merchant account from a bank and in most cases can also be quite expensive. Typically speaking, banks do not provide merchant account services to high risk merchants, if they do their rates will be higher than available from a third party provider. Third party merchant account providers can provide accounts to high risk merchants as they have relationships with multiple banks, allowing them to ‘spread’ around the risk.
Due to many competing third party providers, rates for high risk merchant accounts can be significantly lower than those from a bank. However, the rates will be higher in order to offset the risk involved. Typically, application fees for a high risk account range from $500 to $5000, though not all providers charge application fees. Then there are two charges that occur each time a transaction is processed:

• The transaction fee is a flat rate fee between $0.35 and $0.75
• The discount rate is a percentage of the transaction amount, and is usually anywhere from 3% to 15% for a high risk merchant.

Other fees include monthly statements and services such as fraud protection, as well as charges for refunds and charge backs.

[BrentK4343]

For me, I run a small collection agency and we are considered a "high risk" account. Even so there are several credit card processing companies that are willing to work with you, the trick is to find one that can match any other low rate and can offer a high approval rate (look for anything above 95%). I personally chose to go with Zeno Tools. But do the research for yourself. Keep in mind that there are 3 ways a credit card processing company may charge you- especially those that are high risk:

-An up-front fee to start services
- A recurring monthly fee
- Per-transaction fees

Its best to find a company that doesn't charge all three, obviously, but also choosing one that has direct integration with your existing collection software to cut back on having to completely reformat that too. That's my two-cents. Thanks for the post.

[mikkel99]

What the start up cost