Top 10 High Risk Merchant Service Industries That Everyone Must Be Aware
In this year, we see a lot of advancement in terms of technology. This has provided a digital platform for all businesses to start offering their products and services online. This brings a lot of better business opportunity and better industry/ customer exposure. But at the time of getting a merchant account to accept credit cards, you might see that the processor declined your application by mentioning the reasons as “high risk business”. What is a high risk merchant service? How to get the merchant account for a high risk business? Let’s discuss this more in detail.
What Does A High Risk Merchant Service Mean?
In terms of business, there are two types of businesses: I.e. Low Risk business or a high risk business. There can be several reasons for a small business to be categorized under the high risk industry which further requires to have high risk merchant service. Some of the reasons behind this can be as follows:
- You are selling most of the products and services by using recurring billing methods.
- The business that you are operating is under a highly regulated industry
- Your business payment processing involves a large ticket transaction.
- There can be several factors like the reputation of industry or type of business by the bank norms
- The business merchant shows a bad credit report
- Performing a lot of transactions with a CNP (card not present payments)
- Your business is having a large number of chargebacks or has been several occurrences of scams or fraudulent activities.
What Are The Top 10 High Risk Merchant Service Industries?
There are a lot of industries that are to be considered as a high risk business and needs to have a high risk merchant service. Here we have mentioned the top 10 high risk merchant service industries that are most popular, and every business merchant should be aware of it.
- Alcohol Or Liquor Business: In respect to the fulfilment of compliance and laws of the state government, the business merchant usually juggles for being in customer satisfaction and sales. And when you start offering the same type of product and services on an online platform, you become more prone to online frauds. The legal age for buying alcohol varies from country to country.
- Adult Industry: The adult industry is one of the most badly reputed business categories according to most financial institutions and banks. This adult business is also one of the businesses that include a lot of transactions in a day. Finding the right payment processor is a must to continue selling services.
- Firearms Selling Business: A person may purchase a gun for a variety of reasons. It can be because of hunting purpose, personal safety, shooting practices. It is also one of the booming industries. But it is a risky business as well because of several laws and regulations.
- Pharmacies Business: Selling pharma products like medicines on an online platform is considered as a high risk merchant service industry. This is because of serious restrictions on drug control acts in states. In fact, it is required to have an electronic prescription to sell some types of medicines.
- High-Ticket Sale Business: People generally shop online for lowest deals available over different stores. But there are some special products or services that are made for luxury and a rich lifestyle. This can also be buying an expensive kind of stuff online—for example, Real estate business, Online Jeweler, Furniture, Tours and Travel Agency.
- Multi-level marketing Business: A multi-level marketing business is also referred to as networking or referral business. In fact, in Europe, it is one of the business categories that has passed revenue of about 30 million euros. But because of the unpredictable business growth, legal issues and high potential of chargebacks, these MLM businesses are considered as a high risk merchant service business.
- Loan Business: There is around 11 per cent growth in the people who opts for a loan in Europe every year. This growth and demand have made a loan lending business as one of the booming businesses as well. But at the same time, new small companies have started offering loans to anyone despite such verifications. This involves a lot higher chances of risk of not receiving loan payback and bankruptcy.
- Nutraceuticals Business: Such businesses usually find it difficult to get the merchant account and payment processing solution. This can be because of using recurring billing services and not meeting the expectations of customers as per the product mentioned as in the description. This results in a higher chargeback.
- Vape, Cig or Tobacco Selling Businesses: Selling Cig, tobacco and vape products online is one of the highest risky businesses. There are a lot of regulations, age factors and taxation involved.
- Subscription or Membership Service Business: One of the major factors that do a subscription-based service as high risk is the false advertisement. There are a lot of businesses that provide and offer free trials, and later on, they get the agreement signed from the merchant to deduct monthly subscription charges. Such type of activities leads to higher chargebacks and reputational issues.
How To Get Processing Solution For High Risk Merchant Service In Europe?
If your EU based business comes under a high risk business category and you are finding it difficult to get the high risk merchant service or card payment processing solution, Quadrapay is all your stop. We are working with a team of industry experts who understands your business requirements and then offer the best card payment solution that fits your business needs.
For more information, you can get in touch with us at [email protected].