high risk merchant accounts

Many companies, although founded by hard-working entrepreneurs, are forced to endure the stigma of being designated a “high-risk merchant.” Moreover, many of the businesses saddled with that label aren’t even aware of it until they look into partnering with a payment processor and find out they’ll be hit with high fees to maintain a merchant account or be refused service outright.

Even worse, some of these organizations are then told that there is nothing they can do to change their high-risk status. Here’s some information on why some companies are designated as high-risk businesses, and how they can still get quality merchant account services.

What is a high-risk merchant?

While there is no universal set of characteristics that define a high-risk business, there are certain factors that banks or payment processors flag. These qualities include:

  • Being a new business
  • Low sales volume
  • High sales volume
  • Low average ticket size
  • Operating in a field or industry with high chargeback rates
  • Owner’s low personal credit score
  • Being an online retailer
  • Doing business globally

Additionally, businesses that don’t fit the above-listed criteria may find themselves being considered high-risk simply because of the industry they operate in. Some of the affected industries include:

  • Collection agencies
  • Credit repair companies
  • Electronic cigarette vendors
  • Payday loans companies
  • Multi-level marketing organizations
  • Loan modification companies

For businesses that operate in those sectors, merchant account services can be either prohibitively expensive or altogether inaccessible. And while merchants in other industries can remove their high-risk designation by staying in business and growing their ticket size and customer base, companies in the above-listed sectors typically never become low-risk merchants.

What is a low-risk merchant?

While the criteria for being a low-risk merchant can vary by provider, general qualities of low-risk companies include:

  • Being in business for a long time
  • Only conducting business in “low-risk” parts of the world like the United States, Canada and the European Union
  • Not accepting card-not-present transactions
  • An average ticket size of $50 or more
  • A monthly sales volume of $20,000 or more
  • Operating in a low-risk field like book sales, apparel retail or medical services

Businesses that are considered to be low-risk by payment service providers can get fair rates, fair policies, and chargeback protection.

The benefits of having a high-risk merchant account

Because of the stigma of the high-risk label, companies that are considered to be high-risk may believe it’s not worth it to partner with a payment processor. But there are a number of ways in which a quality processor like Premier One Payments can actually help an organization succeed.

The most obvious benefit is that merchant account services allow retailers, government agencies and nonprofit organizations to process credit and debit transactions. And because consumers not only prefer to use payment cards over cash but also spend more when they do, merchants have a significant incentive to accept card payments.

Plus, integrated payment processors offer businesses the opportunity to accept more than just card payments. Once their high-risk accounts are set up, they’ll be able to take mobile payments and checks.

Moreover, partnering with a merchant account provider gives merchants the ability to accept payments from all over the world, which broadens their potential client base significantly.

Why your business should partner with Premier One

With more than 28 years of experience working with high-risk merchants, Premier One understands their unique needs. That’s why our payment processing services include:

  • In-person, phone and online payment processing services for high-risk merchants
  • No setup fees
  • Approval of 97.8% of merchant applications within 48 hours
  • No volume caps
  • Fair rates and policies
  • Robust chargeback protection
  • Offshore and domestic processing
  • Beyond secure terminals
  • Load-balancing gateways
  • Multiple MIDS processing
  • Account specialists available by email and phone

If you’re ready to take your business to the next level, apply now to get a merchant account with Premier One Payments.

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