Canadian High Risk Merchant Accounts and how to get one?

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Canadian High Risk Merchant Accounts and how to get one?

Canada is a well-developed economy. There are a lot of small and large businesses. No matter what industry they are into every one requires a merchant account or payment processing solution. Sometimes it becomes incredibly challenging to get a merchant account primarily because few sectors are considered high risk.

Before we discuss how you can get a Canadian high-risk merchant account. Lets primarily talk about a couple of industries that are considered high risk. Few of the most common Industries that are regarded as high risk are:

1. Online Pharmacy
2. Online Dating
3. Credit Repair
4. Remote PC support
5. Nutraceuticals
6. Travel Agencies
7. Electronic Cigarettes
8. Weight loss products
9. Skin care

In this article, we will quickly go ahead and understand the current scenario of high-risk merchant account processing in Canada. In Canada, most of the payment processors prefer to underwrite only those merchants attract a little number of chargebacks. It is because Financial Institutions have to reduce their risk and if they do not reduce risk, they may find themselves encountering massive challenges in future.

In This Scenario, What Can A Merchant Do If He Is Categorized As High Risk?

The best opportunity for Canada based merchant would be to approach an offshore payment service provider or offshore merchant account, provider. Merchants located in Canada may have to register a company in the European Union if the processor is from the European Union. This will allow the European Union processor to have a look at the merchant’s application. Registering a company in the European Union is not very expensive. In a few countries, the registration can cost less than $100. Most of the time, the merchant has to register a European company after the approval and before starting to process credit card transactions.

Let’s Also Talk About The Rate Of The Transaction.

If Canada based merchants get a solution from a Canada based payment processor then yes they will be paying low transaction fees but in case if the processor is not located in Canada and is an Offshore payment service provider, then the merchant will have to pay a higher transaction fee. The merchant may also be subject to a fixed or a rolling reserve. Rolling reserve helps the payment processing companies to reduce the chargeback risk and also reduce the credit risk.

If the merchant is from a high-risk industry, the payment processor may put a delay in settlement of the fund. Domestic processors usually transfer the funds from the merchant account to the merchant’s business bank account within two to three working days. In case of Offshore payment service provider, most of the time the settlement is done with the arrear of 1 to 2 weeks or sometimes even longer

Let’s Understand The Application Process Of An Offshore Merchant Account For A Canadian Merchant.

The application process is pretty much same as it works with any Merchant account provider in Canada. The Merchant sends application with the KYC document to the credit card processing company. The underwriting team looks at the application, KYC documents, and the merchant’s website. Based on the internal analysis, the offshore payment processing company will come to a conclusion whether the merchant should be given a merchant account or not. If the merchant is approved then the merchant can easily integrate the payment processing solutions to the business website. This integration process is called API integration. Most of the Offshore payment service providers that assist Canada based merchants offer readymade CMS plugins.

Some of the most common CMS used on Canadian websites are

1. WordPress with Woo commerce
2. Magento
3. PrestaShop
4. OpenCart

So if you are looking forward to getting a high-risk merchant account in Canada and if your applications have been declined multiple times. You can contact Quadrapay and send us to [email protected]. We work with various payment processing companies across the world. Some of them do onboard merchants from few high risk Industries as well. We will be pleased to assist you in helping you find a reliable payment processing solution for your business so that you can start accepting credit and debit card transactions. You can also contact us if you are looking forward to accepting electronic check from the USA. Canada based merchants sell a lot of products and services to the United States customers. If you use ach payment processing solutions then it can help you to reduce your transaction fee and also can help you to reduce the risk of chargebacks. For chargeback, North America based merchants can also use chargeback alerts and notifications services. Feel free to contact us, send an email at [email protected] or fill the contact us form on a website and one of our specialist will be happy to assist you in getting a merchant account for your Canada based high risk business.

Bankim Chandra
Bankim Chandra
Bankim Chandra is a Merchant Account consultant. He works with merchants globally and helps businesses in getting reliable payment processing solution. He writes extensively on the internet about Payment Gateways, Credit Card Processing, Echeck Processing, Chargeback Alerts, ACH and Business Funding.