Last Updated on May 2, 2023 by Umer Malik
A merchant account means an account needed for a business to accept monetary transactions from the clients or other businesses. Every business has its merchant account. Merchant accounts are divided into two groups: low-risk merchant account and high-risk merchant account.
You must follow a regulated and standardized procedure to apply for a merchant account. Though some businesses or industries that are considered ‘high risk’ businesses can face some difficulties in applying for and getting a merchant account. Also, banks put extra charges in these cases.
So, if you are handling a high-risk business or industry,, you need to know what the best high-risk merchant account providers are and why you need to know about them. So it will make your business transaction simple, smooth, and safe.
Here are the top 6 reasons you need a high-risk merchant account provider.
What is a High-Risk Merchant Account?
A merchant account with a high risk of fraudulent activity and extra charges is called a high-risk merchant account. However, every merchant account provider or processor has its definition of high-risk business.
So, a business can be considered as a high risk for a provider. But not considered a high-risk business for another merchant account provider.
6 reasons why you need to high-risk merchant account provider.
1. Worldwide billing
If your business is global and you have to accept monetary transactions worldwide. Then a high-risk merchant account provider is the best way to do all your business transactions in one place. As high-risk merchant accounts do not limit business transactions in a specific region, you can easily access global billing and transmission with it.
2. Multiple payment options-
Another unique side of using high-risk merchant account providers is that they offer flexible payment options. As it includes many regional and global transaction methods. Your customers or clients always have options and can choose their preferred payment methods. This will also open more acceptance for your business.
3. Recurring transactions-
Some businesses and industries need Recurring transactions or payments for different reasons. And for this, high-risk merchant accounts are the only option. The low-risk merchant account may provide many positive sides of safe transactions but have many limitations. And Not allowing recurring payment is one of them. So those businesses who need an allowance for the recurring transactions should go for a merchant account provider that offers high-risk merchant accounts.
4. Wide range of products and services –
All high-risk merchant accounts are approved for offering a wide range of products, facilities, or services. As they go through an extensive screening process to be accepted and approved. This is one of the top reasons to choose a high-risk merchant account provider. So you can access this kind of facility, and the process of getting a high-risk merchant account will be easier and more reliable.
5. High-risk Industries –
The merchant must consult with their payment processor or provider before accepting payments from high-risk merchant accounts. As it includes risks like monetary loss and other fraudulent activities. Businesses like financial services, traveling, legal, auction, retail, Cannabis, online gambling, dating, etc., fall under the high-risk Industries.
6. High-risk Countries or Territories –
High-risk businesses spread worldwide, and dealing with different currencies attracts more fraudulent activities and cyber-attacks from small and regional businesses.
Naturally, they need a robust and reliable payment gateway that also provides a vast range of facilities. And the high-risk merchant account provider is the perfect solution for their problem. A high-risk merchant account processor offers multi-layered security and a reliable method for their business transactions.
Other matters that need attention, like getting a high-risk merchant account provider, will also help you with chargeback issues. Support in technical issues and industry coverage, and also very helpful in compliance related to the transaction. High-risk businesses face many issues that are tough for owners to handle alone. The high-risk merchant account processor or provider can offer them the desired vital features and help to run all the business transactions smoothly.
How to find the right high-risk merchant account provider?
The merchants looking for an excellent high-risk merchant account processor or provider need to know the features of a reliable merchant account provider. You need to keep in mind the following tips before contacting a merchant account provider.
- Security and Industry coverage – As the risk factor is high in high-risk businesses, you need an account provider who can provide you with solid security. Also, covering all industries in the system is a positive side of a good provider that will help you get to your multiple clients in one way.
- PIC compliance and technical support- Another key to getting a good possessor is to check whether they are providing proper PIC compliance and totally technical support. This is a standard facility for any high-risk merchant account processors. If the provider does match this need, you should avoid signing a contract with them.
- Contract duration – Last but not least, always pay close attention to the details of contract duration. Do not opt for a long-term contract, as it can lock you in. Because as time passes, your business needs also change. So, signing a contract that is too long can lead to future difficulties and conflicts. Signing a contract that is not too long or too short is recommended.
A Quick Overview
A high-risk merchant account is a type of payment processing account designed for businesses considered high risk. These businesses typically have a higher likelihood of chargebacks, fraud, and financial losses. While many merchant account providers may not accept high-risk businesses, there are specialized providers that cater to their unique needs.
Here are six reasons why you may need a high-risk merchant account provider:
- Your business operates in a high-risk industry, such as adult entertainment, online gambling, or CBD products.
- Your business has a high rate of chargebacks and refunds, which can be common in industries like travel and hospitality.
- Your business has poor credit or a financial instability history, making it difficult to secure a traditional merchant account.
- Your business operates in multiple countries, which can increase the risk of fraud and require specialized payment processing solutions.
- Your business sells products or services that are prone to fraud, such as high-end electronics or luxury items.
- Your business requires customized payment solutions, such as recurring billing or subscription-based services.
For safe and reliable business transactions, merchants in high-risk businesses or industries must need a high-risk merchant account processor. Choosing a good account provider will help them run all the business smoothly without worrying about fraudulent activities or attacks.
Read also: What is a high risk merchant account? Do you really need it?