When your business is ultimately classified as high risk, things can get tricky. Unfortunately, this is not a designation that you want due to the issues that can come along with it. However, it could simply be a result of the nature of the business that you are operating in.
Factors That Make You High-Risk:
- Grey Market
One of the biggest things that could make your business higher risk than others would be operating in a Grey market area. Some businesses operate in a Grey market like online gambling sites, online gaming sites, adult produces or services and more. These businesses are at a much higher risk for suffering from chargebacks than other businesses. Therefore, they are deemed and classified as high-risk.
Another big thing to go along with it that could get your business classified as a high-risk merchant would be the industry that you operate in. If the industry that you operate in is classified by itself as a high-risk industry you are going to have a much more difficult time getting yourself a merchant account.
- International Business
If you are a business that operates globally, you are going to be at a much higher risk of suffering from chargebacks, fraud, and other kinds of illegal activity that you wouldn’t be subject to if you operated in one single country.
- Average Transaction Size Is Too Large
If you are a business that is dealing with significant sums for your average transaction size, you are going to be deemed a much greater risk than a business with a much smaller average transaction size purely due to the cost of each transaction that you are selling.
- Dealing With Poor Credit
Another big thing that can factor into your business being classified as a high-risk business is having poor credit. If you have less than stellar credit, you are going to be classified as a much higher risk than a business that has stellar credit. After all, your history shows that you are not someone that pays on time or that can be as trusted with credit. You might need to take less than ideal terms if you are a business that has a poor credit history or no credit history at all to speak of. It would be wise to continue to strive to build a better credit history. This way, you will be able to at least prove that your business is capable of paying on time.
Tips For Dealing With Issues:
- Minimizing Chargebacks
The main thing that you are going to want to do when you are looking to deal with issues related to finding and having a successful relationship with a merchant processor would be to do everything possible to minimize chargebacks. Chargebacks are the worst nightmare for credit card processors. Because of this, you want to be sure that you are putting clear information out to your customers about the transaction and what you are selling or offering. By having clear details on what you are offering and possibly better return policies in place, you should be able to minimize the chances of having to deal with chargebacks within your business.
- Limit Fraud
Another big thing that you want to focus on when you are dealing with merchant issues related to a high-risk business account would be to take steps to limit fraudulent activity. This is crucial when you are dealing with a high-risk processor because you can lose your account at any time if they deem that you are too risky or not worth having as a client. You want to take any and all steps that you possibly can to avoid fraudulent activity and transactions. Some of the best ways to prevent fraud would be to look for red flags that can indicate fraud prior to approving the transaction. The best way to do this is to require CVV’s, address verification, and more.
- Find A New Merchant Account
If you are dealing with issues that are not going to be resolved anytime soon or you lose your partnership with your originally merchant account provider, you will want to take the steps that are needed to find a new one immediately. If your business goes without a merchant processor, you are going to lose out on potential business. You want to find a processor that you can transition to immediately to avoid losing business.
- Worry About Renegotiating Later
Sometimes it might be best to take the deal that is on the table now and worry about renegotiating later. Once you have established yourself as a merchant that can be trusted, you will be able to get better terms for your agreement. Having processing history established with a merchant provider is going to be a good way to enter a renegotiating stage.
- Choose The Right Processor
You want to be sure that you are doing your due diligence when it comes to choosing the right processor because you want to find one that is going to offer you sustainability. You are much more likely to deal with issues related to your account if you don’t take the necessary steps to find one that works within your business model. You will want to look at everything by looking at the rates, fees, and commitment required. Along with this, you want to look at the processor’s reputation to find one that is going to be a good long-term choice for your business.
Overall, there are a lot of things that you are going to want to do when it comes to dealing with merchant issues involving a high-risk business. By following the tips above from High Risk Solutions, you should be able to avoid dealing with major issues that can get you kicked off of the account completely. You want to take steps to make your business much less risky for potential merchant account providers and it should allow you to have a successful relationship with the ideal merchant account providers.