High Risk Credit Card Processing In The UK
Did your local bank reject your application for a credit card processing account? Are you struggling with a bad credit score? Do you serve International customers? Did your previous credit card processor terminate your account? Are you selling high ticket items? Is your monthly sales volume of over 20,000 euros? If you answer to any of the above questions is yes then the chances are that you need a High Risk Merchant Account in the UK. Getting High Risk Merchant Accounts in The UK will become easy if you approach ISOs that are authorized to solicit services to High Risk merchants. In reality there are not many. Quadrapay is a proud re-seller of many credit card processors that are comfortable in taking a limited risk on merchants from many high risk industries.
Views Of Traditional UK Sponsor Banks On High Risk Merchants
Traditional Credit Card processing companies and Sponsor Banks in the UK generally prefer to work with businesses from low risk industries. There can be many reasons why a British company will appear as a high risk-oriented merchant. The most common cause is the credit score. Acquiring banks evaluate the creditworthiness of the business owner before opening a merchant account. The solvency plays a critical role regarding the stability and the tenure of the account. If the business owner has excellent credit, then there is a huge possibility that he will be in a better position to handle future chargebacks and disputes. This is the fundamental reason why almost every merchant account provider in the UK runs a credit check for each application. The second reason can be cross-border transactions. Local banks prefer only to offer domestic Credit Card processing facility to merchants. International or Offshore payment service providers do provide cross-border credit card processing facility to British merchants. The industry in which the merchant operates in also plays a critical role in the underwriting process. Credit Card processing companies have strict guidelines for merchants from specific sectors. Britain based credit card processing companies follow merchant classification guidelines and specify each merchant as per the relevant MCC quotes. Some MCC codes are for high risk businesses. Merchants who operate in these industries are also known as High Risk Band Merchant. High Risk Independent Sales Organisations can assist these merchants with credit card processing solutions.
Industries That Require High Risk Merchant Accounts in UK
As mentioned earlier in this article some industries are considered as high risk. Sectors that attract high chargeback ratio are always considered extremely risk-oriented, Few examples can be Credit repair, Technical support and Online pharmacy. Apart from these Industries couple of additional business models are difficult to place. Some of these are listed below.
- Online dating
- Visa and Immigration Consultants
- Crowdfunding platforms
- Online Marketplaces
- Online magazine subscriptions
- Adult entertainment
- Multi level marketing
- Escort listing websites
- Tarot card readers
- CBD Merchant
- Hemp Products
- Payday loans
- Insurance Agencies
The industries mentioned above are always considered high risk. The later section of this article will give more information about how you can get a high risk merchant account in the UK.
Rates And Fees For High Risk Merchant Accounts In The UK.
The rates and the fees vary because of multiple factors. Some credit card processors may offer interchange plus pricing. Interchange is fixed pricing for transactions made on specific card brand and card type. The credit card processor will charge additional fees for each sale apart from the interchange cost. Most of the times UK based high risk merchants may have to pay an MDR of 8% to 10%. To reduce the credit risk your acquiring bank or ISO will also ask you to agree to rolling reserve. This rolling reserve works as a cushion of comfort for the payment processor. In case of huge chargebacks, disputes or merchants bankruptcy the processor can use this reserve to pay the buyers. Processing companies usually make payment to merchants on a weekly basis. Sometimes on specific accounts, credit card processors may put one or two week arrear to reduce credit risk. Companies like Quadrapay assist businesses in getting high risk merchant accounts in the UK. You can also search for Third-Party High Risk Independent Sales Organisations. These ISOs are specialised in high risk merchant account solicitation.
How Chargebacks Can Affect Your UK High Risk Merchant Account
Now that you understand about processors let’s quickly know how you can keep your chargeback to sales ratio under the prescribed limit. Most of the credit card brands do not allow merchants to cross one per cent of chargeback ratio. This can create severe challenges for high risk merchants. If the merchant wishes to continue processing payments, then he must implement the best practices. Proper communication with the customer helps businesses in developing a long-term and healthy relationship with the buyer. The merchant must have a support phone number. This phone number should be active 24 hours a day. Your UK customers must have access to the support line. If any of your customers have issues, then you must resolve the issue on priority. Apart from offering better customer service we also recommend you to use chargeback alerts and notifications services. Well, known CDRN companies provide these services. Merchants may get alerts regarding disputes raised by credit card holders. Most of the times customers will get alert in near real-time. After getting the alerts merchant can contact the cardholder and try to resolve the problem. Most service providers will offer a time frame of 24 to 72 hours; The merchant can either retain the customer or initiate the refund within this time frame. In case the merchant wishes to fight the chargeback case then he can do the same. Send us an email on [email protected] if you have questions regarding High Risk Merchant Account UK.