If you have done transactions online or if you run an online business, then you must have an idea regarding what high-risk merchant accounts are. If you do not have even the slightest idea, then let us explain.
According to the name itself, the high-risk merchant accounts are those payment processing business accounts that are considered by the banks to be of high risk. The reason for this is that normally big businesses are more prone to chargebacks along with the responsibility of paying higher fees for the merchant services.
What are High Risk Merchant Services and Low Risk Merchant Services?
Another doubt that might arise from the kind of risk associated with the big business accounts is whether your business account is a high risk merchant or a low risk merchant. Now, in order to evaluate this, there are many characteristics through which we can categorize in terms of potential risk.
Though there are different sets of guidelines laid forward by different payment processors organizations, the essential characteristics remain the same for the majority of them.
What is a Low-Risk Merchant?
Here are some of the general yet important characteristics that are associated with the low-risk merchant sites:
- If the monthly turnover of your business is less than $20,000.
- The average credit card transaction amount is less than $500.
- The goods and services that your business is dealing in are considered low risk. For example, businesses dealing low-risk clothes, shoes, household products, etc.
- There is a ratio of zero to low chargeback.
- The business should be also operating in a country that is considered of having low risk.
What is a High Risk Merchant?
If your business comes with more chargebacks, it means it is to be considered a high-risk merchant account. In short, the higher the chargeback rate, the higher the risk your business is at. Here are some of the guidelines that most payment processors follow to evaluate whether you are a high risk merchant.
- The monthly sales volume of your business should be more than $20,000.
- The average credit transaction is to be more than $500.
- If the business sells products and services that are considered to be carrying high risk and fraud.
- There is a bad credit history associated with the business and excessive chargebacks.
- The business is financially unstable.
Now that we have known the broad characteristics of classifications, let us move on to the next topic if you are also among those who have a high-risk merchant account.
How to Choose a Perfect High Risk Merchant Services Provider?
Now the next demand is evaluating on what basis you should choose these high risk services providers because there are many factors that will affect your high risk merchant services and transactions. You must always look for the high risk payment processors that provide you with the lowest possible rates, promise you a favorable and credible contract, give the least number of fees and other desirable facilities and services.
1. The high-risk specialisation in the high risk payment processors
Apart from all the marketing aimed towards the high-risk merchant accounts, there should also be the focus on a trained sales staff that deals with high-risk merchant accounts. Similarly, the customer service representative must also be working effectively and punctually.
2. Pricing factor of the high risk payment processors
Another important factor is the price of the high risk payment processor. The price includes both the processing rates and account fees that are assessed on a per-transaction basis and your account fees will be billed monthly or annually according to the payment processor you have opted for.
For processing rates, usually, it is recommended the interchange-plus pricing plan over the tiered pricing plan. You should also keep up the negotiation too because as a high-risk merchant, it is a little difficult to get approved.
3. Contracts
The traditional three-year plan of merchant servicing has been scrapped very recently and instead has been replaced by a month-to-month contract which is more reliable and easy for high-risk merchant accounts.
Top High Risk Payment Processors That You Should be Considering
Coming to the best high risk payment processors in the market, there are many of them which you can consider. Let us take a brief look at the best high risk payment processors for high-risk merchant accounts.
1. Payment cloud
This payment processing company deals with high-risk merchant accounts and relies on a network of third-party processors that acquire banks to do the process of getting your account approved. Even for the retail accounts, you will get a free EMV-compliant card terminal with your account which means as long as you maintain your account, you are free to use it.
So, the account setup is free in the payment cloud along with excellent customer service and a free credit terminal. The only drawback is that the pricing for this high risk payment processor is not disclosed publicly.
2. PayOp
Another one of the best high-risk merchant accounts is PayOp and it offers its processing services in more than 170 countries. Moreover, this processor has more than 300 different payment methods which can be chosen easily via your personal account.
Coming to the transaction fees for the PayOp, it usually starts at 2.4% and 0.2$ which depends on the volume of your transaction, the risk involved in the business, and the type of business you have. Also, there are more than 10 withdrawal methods.
3. Payssion
This is also one of the best high risk payment processors made for high-risk merchant accounts. This international payment provider consists of different payment methods integrated especially for high-risk businesses. Like others, in this too, the commission is charged for every transaction, and apart from that, it does not charge any integration fees or a monthly commission or hidden fees.
These are the top three high risk payment processors that can be used for high-risk merchant services and transactions in businesses.
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