Why Your Business Might Be Considered High-Risk

Some payment providers will not work with businesses that are considered high-risk. There are several reasons your business might be considered high-risk, they include: 

• Having bad credit: A business owner with no credit/limited credit or a poor credit score might qualify the business itself as high-risk. 

• Offering free trials: Payment providers sometimes consider the offering of free trials as high-risk. 

• Recurring billing: If your business offers recurring billing services, it might be considered high-risk. 

• High-ticket sales: Processing large ticket amounts might qualify your business as high-risk.

• Your industry has a high rate of fraud or chargebacks: If the industry has a high rate of fraud or chargebacks (higher than what is considered average), it might be labeled as high-risk. 

However, some high-risk industries fall under separate reasons for why they are categorized as high-risk. One particular example is cryptocurrency. Cryptocurrency exchanges are considered high-risk to most merchant account vendors primarily because of the following reasons:

• Significant volatility: Cryptocurrency is known for being an extremely volatile market, often having unexpected increases and decreases in prices. 

• CNP transactions: Also known as card-not-present transactions, this means a credit or debit card was not physically present for the crypto purchase. 

• Potential for money laundering: Cryptocurrency is not backed by a central authority and it has no physical presence which means the currency is susceptible to money laundering. 

Equipment Needed To Process Payments

Processing credit card and debit card payments for e-commerce transactions doesn’t require any type of equipment. Everything is done online, making it easier than ever to grow your client base and expand your business. However, businesses with brick-and-mortar locations will need a few things in order to accept payments. This usually means having a POS register and a card reader, which can be mobile or more traditional.  

Costs for Using High-Risk Merchant Accounts For Payment Processing

Costs for payment processing solutions will depend on a few factors, including the provider you are using, whether the payments are made in-person or online, and whether your business is considered high-risk (as opposed to low-risk). 

In-person transactions are considered to have less potential for fraud, which means the payment processing fees for these types of payments are often lower.

At TailoredPay, the rates are lower than the industry average and we don’t charge any setup fees for your high-risk business because we believe in making our services accessible to everyone. The exact rate will vary depending on the classification of your business. 

It’s true that high-risk merchant accounts generally come with higher fees than low-risk accounts. However, you can get reasonable rates that enable you to retain more of your profits if you look for payment processing providers who structured their pricing around giving you the most value.

What To Look For When Choosing Your Payment Processing Provider

When choosing a payment processing provider, the below key features are important to consider. While some payment processing options might seem the same at first, many often include hidden setup costs, long wait times for approval, and increased fees for companies deemed high-risk (including start-ups and businesses conducting sales in digital currency). 

Ask yourself these questions before selecting a provider:

• What are the fees? Including setup fees and high-risk industry costs. 
• How quickly are approval decisions provided? 
• Which industries are accepted? 
• What types of industries does the provider cater to? 
• Is there a chargeback prevention system in place?

By asking the above questions and doing your research ahead of time, you’ll be more likely to both save money and work with a provider whose payment system is a better fit for your business needs. Ready To Start Growing Your Business? Here’s How To Apply for a Merchant Account

The application process at TailoredPay can be completed in three easy steps and takes less than 10 minutes:

1. Quickly complete the online application.
2. DocuSign the merchant processing agreement.
3. Wait to be approved by the underwriters (48-72 hours).

You’ll need to include the following documents with your application:

• Passport, Driver’s License, or government-issued ID
• Voided check or bank letter
• If applicable, 3 months of most recent credit card processing statements from your previous or existing provider
• 3 months of most recent business bank statements. If the business is new, 3 months of most recent personal bank statements are required.

TailoredPay: Your Reliable Payment Processing Solution

At TailoredPay, we’re high-risk merchant account and payment processing experts that have our clients’ best interests in mind. Our carefully selected range of online and virtual payment gateways are ideal for high-risk businesses of all shapes and sizes.