Common Myth About Opening A High-Risk Merchant Account
A Merchant knows how much it is vital to have an electronic payment system for their online business or retail shop. A business merchant understands that having an online or digital payment services helps to keep businesses afloat. And obviously, in today’s time, having a digital payment method for your business is essential to grasp the market. As per a research report, in 2018, the global digital payment market size was estimated at USD 43.5 billion. It is expected to register a CAGR of 17.6% from 2019 to 2025. Payment services like EMV processing or Credit card processing are vital for your retail shop. If a merchant has its own eCommerce store then it is necessary to have an eCommerce payment gateway for their site. But there is myth or misconception among merchants. They think that they can avail merchant services and Open High-risk Merchant Account under bank only. Many small merchants believe that credit card processing is the bank’s job. Though it’s true that they can do so, this doesn’t mean that only they are the one who can do so. The lack of information between the merchants let the bank take advantage of them. Thus the bank usually charges higher fees and rates for credit/debit card processing.
Misconception and myth are common, but it’s always good to clear all the myths before opening a high-risk merchant account. It is true that banks can process credit cards for your business, but there are also existing third party processing companies. Unlike banks who operate other services, processing companies dedicatedly offer merchant services. These processing companies even offer low fees and rates with incredible service & support. Stay tuned to know what exactly a high-risk merchant account is? And how businesses can apply for it?
What Is A High-Risk Merchant Account?
A high-risk merchant account is an especial account which handles all the transactions done via credit/debit cards. The high-risk merchant account is provided to businesses by the merchant service providers. The name high-risk merchant account is because the processors flag some business to be risk-oriented. And thus categorized the businesses under the high-risk category. Those businesses categorized as high risk by the processors must open a high-risk merchant account. Usually, companies with high average monthly volume or those who are prone to chargebacks are considered as high risk. Hence more the chargeback, higher the risk. However, chargebacks can be controlled by following some mitigation practice and tactics. We at Quadrapay offers merchants with chargeback alerts, which is recommended to merchants. It helps them to reduce their chargeback ratio, which ultimately increases business growth.
Why It Is A challenge To Open A High-Risk Merchant Account
A low-risk merchant account is for those businesses who are not risk-oriented. Processors like to start the onboarding process with them. It is easy to get a merchant account with comparatively low fees and a smooth onboarding process. But to open a high-risk merchant account, it is not as easy as to get a low-risk merchant account. There are only a few processors who serve the high-risk industry. The processors generally charge higher fees to balance their risk. Some processors even ask for rolling reserves to compensate for the risk. Therefore it is a challenge to find the right processor with affordable fees and low rolling reserve.
We at Quadrapay are specialized in high-risk industries. Our partnered processors offer merchants with one of the best merchant services at affordable rates. We do offer secure and reliable services with 24×7 customer support.
What Documents Are Required to Open a High-Risk Merchant Account?
To apply for a high-risk merchant account, a merchant should have the following documents. It may be possible that a different processor may ask you for different documents. But here is the list which is general and requested by most of the processor.
- Merchant Application Form
- Personal ID Proof
- Voided Check/Bank Letter
- Articles of Incorporation
- Certificate of Incumbency
- 6 Months Bank Statements (most recent)
- 6 Months Processing Statements (if startup, not required)
- Business address and contact number.
- Social Security Number (SSN) or Tax Identification Number (TIN)
These are the common documents required by the merchant account provider to open a merchant account. The documents are not limited to, and maybe more documents are asked by the processor. It is based on your industry type and merchant service requirement.
To open a merchant account under us, fill the pre-approval form. We get back to you to assist you further and help you with a smooth onboarding process.
Get in touch with us at [email protected]
Happy Processing !!!