Things To Consider While Selecting A High-Risk Merchant Service Providers
In this new era, we have seen lots of advancement in terms of payment technology. Accepting digital payment services like debit card, credit card, e-wallet and ACH is a must now. A business can’t expect more customers and profits without a cc processing solution. But things get worse when you are operating a high-risk business. Banks consider the high-risk credit card processing as a risky practice. That’s why they don’t support the high-risk business owner. Even most of the merchant account providers will deny your payment processing request. Don’t worry! To process the high-risk credit card processing payments. You just need to contact high-risk merchant service providers. These account providers like Quadrapay are experienced in terms of high-risk business tradings. A good high-risk processor will also provide you with several valuable benefits needed for an online business.
Overview Of Merchant Account From A High-Risk Merchant Service Providers
A high-risk business is prone to high chargebacks, risk of frauds, reputational risks. Because of the high risk of chargebacks, financial institutions. Or banks never support a high-risk business merchant account. That’s why you need an exclusive merchant account (“high-risk account”). This supports your business to process credit card transactions and other payment methods. A business merchant needs to pay a fee that is applicable as per the rates provided by the high-risk merchant service providers. In return, these high-risk merchant service providers will take care of all your transactions processing through the high-risk merchant accounts. It also helps you to deposit all the funds into your acquiring banks account in a fixed interval of duration.
A business owner has to apply to go through an underwriting process by the high-risk merchant service providers. By this process, the merchant service provider will determine whether your business is under a high-risk category or not.
The essential criteria to check whether your business is high risk or not are:
- Bad Credit Score
- History of High chargebacks
- History of Frauds
- If operating a business under headquartered in another country
- Selling products and services that need age verification. Example, Adult entertainment or Online Tobacco business
- Operating business with a high volume of sales
- New for a type of business in the market
What To Expect With The High-Risk Merchant Service Providers?
Generally, a high-risk business merchant may pay up to 1-3% extra per transaction. Because your merchant service providers are taking a lot of risks included with your business activity. You can expect your high-risk merchant service providers to have:
- Contracts: Some of the high-risk merchant service providers tries to lock you with a fixed rate in the contract. This is beneficial for your high-risk business processing. But it can also become problematic for you if later on, you become a lower risk over time in business. Quadrapay doesn’t trap under any such contracts.
- Chargeback Fees: In the event of chargebacks, the high-risk merchant service providers will charge a fee. Quadrapay provides you with the benefits of chargeback alerts facility. This feature helps you reduce the chargebacks before your business hits the red light!
- Termination Fee: A early termination fee is charged if you try to breach your contract. It should not be voided before the actual date of its expiration. Your high-risk merchant service providers will charge the termination fees. All as per the terms and conditions in the agreement.
- Reserve Keeping: Some merchant account providers may take some portion of your credit card accepted funds. These funds act as a hedge for in the case of online fraud or chargeback. Generally, payment processors may require three types of reserves.
- Rolling Reserve: This reserve holds the portion of your daily transactions. After some period of time, these funds are released and settled into your bank account.
- Fixed Reserve: These are the funds that are kept additionally against every transaction. With the help of this approach, a fixed amount of fund is collected until it reaches the amount which was mentioned in the agreement.
- Up-Front Reserve: These are the funds that are taken for reserve just after signing the agreement. All the funds taken under reserve are not returned until it meets with the value stated in the fees.
- Account Termination: If a business merchant does not follow the regulations over time and becomes more risker and attract high chargebacks. Then that account may get terminated by the high-risk merchant service providers. Generally, this problem arises when a merchant account provider uses a single account and shares it with several clients. Just like an online PSP merchant account, if a business merchant under the same account becomes riskier than others. Then the service provider will freeze that sub-account to retain the stability of other merchant accounts under the same MID.
What Are The Essential Documents Required To Get A High-Risk Merchant Account?
Quadrapay is one of the best high-risk merchant service providers in the industry. We provide several processing solutions for every business needs, whether it can be for a high-risk merchant account or a low-risk merchant account.
We are also well experienced in terms of high-risk international merchant accounts or offshore merchant account services.
We know what a business actually needs. That’s why we have also made the application procedure to get a merchant account simpler for you. You just have to fill the application form with all the required details along with all the necessary documents. These documents are very much essential for your merchant account request approval.
- A government-approved ID, for example, a passport or a driving license
- A live and secured website (In case you want to sell products and services online)
- Your recent bank account statements up to the last six months
- Your processing statements up to the last six months
- SSL Certificate
- Full information about company registration
- Void Check
- Tax Identification Number (TIN)or a Social Security Number (SSN)
After submitting all the required documents along with the application form, your high-risk merchant service providers will verify and may approve it within 48 hours.
If you still need further assistance, we are always ready to assist your query at [email protected].