High Risk Credit Card Processing in New Zealand
Getting approved for a high-risk merchant account in New Zealand can be a difficult task sometimes. If your business operates in certain industries such as healthcare, nutraceuticals, subscriptions, adult, or debt collection, then most traditional sponsor banks and payment service providers may label you as high-risk. However, if you reach the right providers, then you may get a merchant account, which will meet your credit card processing requirements.
In this comprehensive guide, we are going to explain everything that you need to know about high-risk credit card processing in New Zealand, including the approval requirements, expected timelines, FAQs, and tips to maximise the acceptance rate.
Why Certain Businesses Are Labelled as High Risk by PSPs in New Zealand
Credit card processing companies across New Zealand evaluate merchants based on their risk profile. They check the potential of chargebacks, regulatory issues, reputational concerns, and transaction patterns. Some industries naturally carry more risk in comparison with regular businesses. Few of such industries are listed below.
| Industry | Description |
|---|---|
| Travel Agencies and Tour Operators | These are considered high-risk because they have a high chargeback potential. This is because travel agencies accept future-dated bookings. |
| Online Ticket Booking Agencies | Online ticket booking agencies face problems in getting credit card merchant accounts because they sell services that are prepaid for future events. Merchants operating in the online ticket booking industry must have strong refund policies. |
| Legal Nutraceuticals and Supplements | Legal nutraceuticals and supplements also face problems in getting approved. This is because many merchants have made fake claims about product efficiency in the past, leading to high chargebacks. Nutraceutical and supplement businesses must comply with New Zealand’s Therapeutic Goods Act. |
| High-Ticket Coaching and Consulting Businesses | Generally, these businesses get a “no” from low-risk processors because of the possibility of high refund disputes. Merchants in this industry must use proper contracts that can help reduce this risk. |
| Online Educational Courses | Online educational courses, which are generally not accredited by any university, are subject to additional scrutiny by underwriters. Businesses operating in the online education industry must deliver quality education, and the terms of service should be solid. |
| Legal and Product-Based Multi-Level Marketing Companies | These companies are subject to regulatory scrutiny and often face high customer attrition. Legal multi-level marketing companies must avoid any pyramid-type models. It is important to know that the Fair Trading Act 1986 prohibits pyramid schemes, and merchants must comply with all government guidelines. |
| SaaS Subscription (B2B or B2C) | These carry the risk of chargebacks because of recurring billing. These merchants must have clear cancellation policies, as it can significantly help reduce the risk of disputes and cancellations. |
| Website Development Companies, Digital Marketing Agencies, and SEO Businesses | These businesses face problems in getting merchant accounts because of service delivery disputes. They must have signed SOWs (Statements of Work) and contracts to help reduce disputes with customers. |
| Debt Management and Financial Consulting | This is a very sensitive space, as it is highly regulated and compliance-driven. Merchants operating in the debt collection industry or financial services industry must comply with New Zealand financial laws as well as any other applicable laws. |
| Legal Services (Injury, Immigration, Business Law) | These merchants are generally exposed to high chargebacks because of large invoices. They should have transparent retainer agreements. |
| Funeral Services and Prepaid Burial Plans | Businesses that offer prepaid burial plans accept prepayments for future services. For these businesses, a trust account structure is often required. |
| Furniture Sales | Furniture sales can have long lead times. That is why these merchants must have clear order terms explained to customers at the time of purchase. |
| High-Value Electronics Sales | Selling high-value electronics online can attract the risk of payment fraud. That is why it is important to implement strong KYC and fraud prevention measures. |
| Timeshare Resale and Vacation Clubs | These are historically known to attract high consumer complaints. Merchants must be fully licenced and have transparent business models to avoid issues with their merchant accounts. |
For businesses in the above-listed sectors as well as any other industries where there is the potential of high chargebacks, large sales volumes, or recurring billing models, all these factors can trigger your high-risk classification. Understanding these factors will help you better prepare for underwriting. You should be transparent at the time of application and provide all required documents. As per your industry, you should meet the required compliance standards. This will help you get approved easily. Remember that chargeback mitigation should be your number one focus. Payment processors in New Zealand, Australia, and across the world hate merchants that attract high chargebacks.
Key Benefits of High Risk Merchant Accounts
If you compare the pricing of a high-risk merchant account with the regular processing solution then you will realize that you may be paying slightly more. However, the benefits can be significant.
Global Sales Capability
When your business starts accepting credit card payments despite of your industry type then you can compete with regular businesses and start accepting payments from across the globe including New Zealand and Australia.
Accept International Payments with Multiple Currencies
A high-risk merchant account will allow you to accept payments in multiple currencies. This means that your customers will see the pricing in their local currency. This feature utilizes dynamic currency conversion and latest exchange rates. By offering your customers the ability to pay in the local currency you will make them feel more comfortable and this can result in a greater conversion.
Expanded Payment Methods
Most of the high-risk payment service providers allow merchants to accept different types of payment methods including Visa Card, MasterCard, American Express, Discover, crypto, bank transfer, and even digital wallet payments.
Chargeback Management Tools
High-risk credit card processing companies that onboard merchants from New Zealand take extra care when it comes to chargeback management. They use advanced fraud identification and reduction tools which helps the merchant keep the account active for longer time by reducing the risk. Many payment service providers also allow merchants to add external services for chargeback alerts such as Verifi and Ethoca.
Custom Fee Structures
If your business expects to process a substantial amount of transaction volume, then you can easily negotiate with your payment service provider to get better rates.
Dedicated Customer Support
If you work with the local payment service provider from the same region then there is a high possibility that you will be getting dedicated customer support. The payment service provider will also keep a 24/7 account monitoring to reduce the risk of chargebacks and fraud.
Get easy approval for global high-risk accounts
Solutions for Low Risk Businesses & Merchants Looking to Lower Fees
Even if your business is not classified as high risk you can still approach the specialized payment service providers and get lower fees and better support. Many merchants may be overpaying due to outdated contracts or inflexible providers. These merchants can shop around and explore better rates from other providers. Some of the industries that can benefit by credit card processing rate analysis are listed below:
- Retail stores
- Professional services (consultants, legal, medical)
- Ecommerce with low chargeback rates
- Non-profits and charitable organizations
Trapped With an Expensive Processor? We Can Help You Switch
Many merchants feel stuck with the current credit card processing company because of high fees, complex contracts, or cancellation penalties. Some may even be frustrated because of poor customer support or they may be paying high rolling reserve or the accounts may have been shutdown without warning.
We can help your business move to better providers. A detailed savings analysis can be done. If you share your credit card processing statement with us then our team can do the actual cost analysis and tell you how much fees you are paying on the total sales volume. If we believe that our partners can provide you a lower rate then we will straight ahead go and connect you with our payment service provider partners.
Whether you are a high risk or a low risk business in New Zealand we can help you in getting affordable and feature-rich payment processing solution.
What Banks & Providers Look For During Approval
When you apply with an acquiring bank or a payment service provider for a merchant account you will have to submit some documents. These are called the know your customer documents. To increase the chances of your approval make sure you provide updated information and all the documents that your payment processor requests.
- Business License & Registration: This is the proof of business registration. It can be a company formation document or a trust document depending on the structure of your entity.
- Bank Statements (3-6 months): Some payment processors may ask for 3-6 months of bank statements.
- Processing History & Sales Volume Reports: If you are already accepting credit and debit card payments for your business then you will have to provide the recent processing history which clearly shows your refund and chargeback percentage.
- Chargeback Management Plan: For select industries the payment processor may ask for a business plan and a chargeback management policy.
- Website Terms, Refund, and Privacy Policies: To accept payments on your website, make sure that the footer of the website has links to refund and privacy policy.
Frequently Asked Questions (FAQ)
1. Can I open a high risk merchant account with bad credit?
Yes, but you must be ready to expect stricter underwriting, high reserves, and possibly higher fees. A strong business model and previous processing history can sometimes help offset weak credit.
2. How long does approval take?
Typically 5-15 business days is required for detailed underwriting of high risk merchant accounts. This depends a lot on documentation completeness and industry risk.
3. Are rolling reserves permanent?
Usually the rolling reserve terms can be reviewed after 6-12 months of stable processing history with minimum chargebacks.
4. Can I use multiple processors for risk diversification?
Yes, if your processing volume is high then you can use multiple providers to protect payment continuity. However in that case you may need a multi MID payment gateway that allows you to add various providers under one gateway.
5. What if my current processor terminates my account?
In case your current processor has terminated your account then you should immediately seek specialized high risk providers who understand your vertical and can onboard quickly.
6. Can you help low risk businesses lower their processing rates?
Yes, we provide free statement audits and it can help identify savings opportunities for both high risk and low risk businesses.
7. What if my current contract has cancellation penalties?
We assist merchants with full contract reviews and also provide guidance on switching providers. Sometimes merchants pay high fees and when they switch to a low fee option then after a few months they may have enough savings that can be equally or more than the early termination penalty.
Conclusion: Secure Your Merchant Account in New Zealand
Finding the merchant account that supports higher risk businesses in New Zealand requires expertise, proper documentation, and support of reliable providers. Our team is capable of helping you find a suitable provider at affordable rates. For personalized assistance, consult an expert merchant account consultant at QuadraPay today by filling the online form.