As you may know from experience, many high risk businesses struggle to achieve approval for their merchant account from financial institutions like traditional banks. Banks and the majority of payment processors often prefer not to do business with high risk companies due to the higher chargeback rates and risks associated with these companies. However, these companies can turn to certain financial institutions for a high risk credit card processing merchant account. Here are some of the benefits of getting such a merchant account for high risk businesses.
What is High Risk Credit Card Processing?
Before learning about the benefits of a high risk credit card processing merchant account, you should have a good idea of what high risk credit card processing is. You probably already know that all businesses need a merchant account from an acquiring bank in order to accept credit card payments from customers. However, you may not know that there are two different types of merchant accounts: low risk and high risk.
Any company that is perceived as risky will need a high risk payment processor to accept credit card payments from customers. Most traditional processors refuse to accept high risk clients. However, overseas, there are many high risk payment processors.
Pros of High Risk Credit Card Processing
Most people perceive high risk credit card processing as entirely detrimental. However, the truth is that there are many advantages of high risk credit card processing. One advantage of global expansion. Any merchant who wants to achieve success in the global eCommerce community should get a high risk payment processor rather than a low risk payment processor. This is because high risk payment processors allow a company more opportunities for expansion, which makes the higher processing fees worthwhile.
In most cases, a low risk merchant cannot process different currencies, accept card-not-present transactions, or sell to clients located outside of Northern or Western Europe, Australia, US, Canada, or Japan. Therefore, high risk merchant accounts are appealing to eCommerce businesses due to high earning potential of the sales. It is essential for an eCommerce business to be able to make a sale with anyone no matter the time or place.
Another pro of high risk credit card processing is that the earning potential is limitless. Unlike high risk merchants, low risk merchants are unable to accept credit card transactions higher than $500, earn more than $20,000 in a month, sell any service or product, or offer regular payments. Many of these limitations can hinder the earning potential of a business severely.
For more information about the many benefits of a high risk credit card processing merchant account, don't hesitate to contact us.