Even with a very low chargeback ratio, voucher-based businesses like those that offer spa or experience vouchers, they are generally flagged as high-risk by payment service providers. You may be interested in knowing why this happens.
This simply happens because payment processors don’t just look at your current chargeback, they also evaluate the potential of future chargeback percentage. Vouchers are generally considered a delayed fulfillment product. That means customers can actually redeem them weeks or months later from the date when they purchased the voucher.
This situation increases the refund risk and risk of friendly fraud. Along with that, it also adds the potential liability risk. Bigger risk appears when the business gets shut down or somehow fails to deliver to the actual customer.
Another factor is cross-border payment processing complexity. If you are a Canadian business processing payments in the UK, US, or Australia, then most of the traditional payment service providers will see it as multi-jurisdictional risk. You know about currency mismatch, regulatory differences, and cardholder location versus merchant location.
All of this increases the scrutiny. And this is why payment platforms like Stripe may sometimes shut down Merchant accounts of voucher selling businesses, even if the matrices, they look super clean. The real situation here is not chasing a low risk label, but it is to align with the right high risk friendly acquiring services.
You should look for a partner that understands your business model. To excel in a voucher selling business in Canada or anywhere in the world, you would need multi-currency processing capability with localized acquiring. The provider should have the capability of handling slightly higher chargebacks. They should support digital voucher-based fulfillment models. And along with that, you should also take care of the geographical alignment. That means EU traffic should go through EU acquirers and American traffic should go through US acquirers.
At QuadraPay, we specialize in providing merchant accounts for businesses exactly like yours. Those selling vouchers or businesses that are in travel services, spas, or experience marketplaces. We can deliver highly efficient merchant accounts and payment gateways for such businesses across different nations, including Canada, the US, UK, and European Union.
Our team does not only get you approved. We basically help you set up a solution that actually lasts long and also helps you scale your business. If you are doing high volume and are serious about growth, then we would recommend you not to take risk with unstable processors or regular low-risk processing solutions. You should get a setup that is actually built for business models like yours from day one.
Learn about high risk merchant account solutions we offer in Canada and US.