Are you encountering challenges in securing a conventional merchant account for your business, finding it labeled as high risk? This predicament can limit your options and result in several issues like increased card processing fees. Let’s look into the concept of a high risk payment processing account to better understand its implications.
Understanding What a High Risk Payment Processing Account Is
A high risk payment processing account serves as a payment processing solution tailored for businesses deemed riskier by banks than those with standard accounts. Factors contributing to this classification may include a notable volume of chargebacks, a history of fraud, poor credit rating, or other reasons that we will explore in this discussion.
Businesses labeled as high risk often encounter additional scrutiny and are required to pay higher fees when seeking merchant services. This heightened level of scrutiny is a consequence of the perceived risk factors associated with the business.
In cases where a business has a history of numerous refunds and chargebacks, a merchant bank may impose a rolling reserve on their account. This reserve represents a predetermined amount of funds aimed at covering potential chargebacks, offering a safeguard for both the business and the payment processing service. Understanding the intricacies of high risk payment gateway accounts is crucial for navigating the challenges and making informed decisions to ensure the financial health of your business.
Who are These Accounts Suitable for?
When seeking approval for a merchant account, your business undergoes a thorough evaluation, assessing the level of risk it poses to the bank or financial institution providing the account. Various sectors, such as online gaming, certain e-commerce companies and whatnot are often categorized as ‘high-risk businesses.’
If your business operates within one of these sectors or has faced rejection from a bank in the past, opting for a high risk payment gateway, like the one offered at Pay.cc becomes a practical solution, facilitating the smooth continuation of your business operations.
What Makes High Risk Payment Processing Accounts Stand out?
When you choose a high risk payment gateway, your enterprise can benefit from more flexible payment acceptance options compared to their low-risk counterparts. Unlike low-risk merchants, high-risk businesses have the ability to:
Sell a Diverse Range of Products and Services
High-risk merchants are not as limited in the types of products and services they can offer for purchase through credit or debit card transactions. This flexibility enables them to cater to a broader market and diverse customer needs.
Collect Recurring Payments
Businesses that utilize high risk payment processing can establish and manage recurring payment arrangements. This capability is advantageous for businesses that provide subscription services or other recurring billing models, allowing for a steady and predictable stream of revenue.
Process High Sales Volumes for Special Events
Igaming enterprises and other companies that use a high risk payment gateway have the flexibility to handle elevated sales volumes during promotions, special events or product launches. This adaptability is particularly valuable for businesses that experience periodic spikes in sales activity.
It is essential to note that while there are low-risk merchant accounts that may offer these options, engaging in activities that involve selling a wide range of products or processing high sales volumes can elevate the likelihood of a merchant eventually requiring a high-risk account.
How to Choose the Right Account for igaming Payments?
When considering potential high risk payment processing account provider like Pay.cc as a prospective partner for your business, it is important to conduct a thorough evaluation of various factors. This thorough assessment will empower you to make a well-informed decision that aligns with the your business’s objectives. Here are key factors to consider:
Check their Fees
A reliable igaming payment gateway should be willing to customize transaction fees and rates based on the specific needs and financial dynamics of your business. This flexibility ensures that your payment processing costs align with your budget and revenue model. It would also help to assess the provider’s ability to tailor their suite of products and services to match your business requirements. Whether you need specialized reporting tools or industry-specific features, a flexible provider should accommodate these customization needs.
Familiarity with your Industry
Opting for a high risk payment processing provider with familiarity in your specific industry offers notable advantages. For instance, a provider well-versed in your industry is more likely to have a comprehensive understanding of the typical transactions and payment patterns associated with your business. This familiarity will help them to offer tailored solutions that align your industry’s requirements.
What’s more, industry-specific knowledge equips a provider to better detect and prevent fraudulent activities. Recognizing the nuances inherent to your sector, they can implement targeted fraud prevention measures, enhancing the overall security of your payment processing.
Final Thoughts
Remember, the process of selecting a high risk payment processing account provider is a critical decision that significantly impacts the financial operations and security of your business. Once you incorporate the right psp to your enterprise, you are highly likely to see an improvement in your transactions and overall operations