High-risk payment gateway accounts are at significant risk of charge-backs and fraud scams. Therefore, payment processors that accept such accounts charge higher processing fees to counter such high risk. The most common reasons for categorising into high-risk accounts are having a history of credit card theft, poor credit score, or having a new online business.
High-risk payment gateways, also known as payment processors, have several advantages compared to low-risk accounts. Here are the reasons you should opt for a high-risk payment gateway.
Six reasons you should opt for high risk payment gateway
These are some reasons business owners opt for specialist payment gateways when transacting in their businesses.
1. Can accept numerous currencies
Creating a high-risk merchant account with a well-known payment processor is an excellent decision if you want to make your business global. You can easily receive payments from customers worldwide in their local currencies, quick customer verification, and transaction approvals.
Unlike low-risk, high-risk payment gateways do not have limits on currency transactions. It, therefore, promotes the growth of the online business, increasing your revenue. You can also integrate your payment processor with your online business account. It will make it easy for you to receive payments.
As you look for the best payment gateway, ensure you get one that provides safe end-to-end payment for your credit and debit card transactions. It is also wise to check their transaction fee rates to ensure you get the best deal.
2. Security against charge backs
Protection against charge-backs is essential for high-risk businesses. Least to say, charge-backs have been known to push companies to bankruptcy. High-risk online merchants protect their business from charge-backs using the following ways:
- Adding a no charge-back payment during checkout
- Coming up with a clear refund policy
- Having a clear shipping description
- Providing accurate descriptions of goods being sold
- Providing contacts from which consumers can reach you.
- Having 3D security
- Using verification billing systems
- Asking for card security codes during purchase.
3. Accept credit and debit cards
Payment gateways increase your business’s attract-ability to consumers by allowing you to accept credit and debit cards. Studies have shown that customers who use credit and debit cards in their transactions spend more than those who use cash. Customers will tend to return to your e-shop for more as you provide multiple choices in terms of payment.
4. Information security
High-risk gateway providers use the latest technologies to detect and prevent fraudulent activities on merchant accounts. They also make sure that sensitive customer financial information is safely handled. This is mainly done using layered security systems that screen and authenticate credit and debit cards during payment and processing. Enhanced security status will give customers more trust in your products, promoting customer satisfaction.
5. Less risk of account termination
High-risk payment processors offer merchants with a history of relatively high charge-backs to redeem themselves. These payment providers do not shy away from a poor credit rating or a previously terminated merchant account.
6. Higher opportunity for revenue
This is mainly for businesses with recurring payment models. This model enables merchants to retain their business for a long time, allowing them to grow their business and obtain a steady source of income.
Businesses that are considered high risk
Your business is high-risk if it has numerous charge-backs, overly high ticket sales, and an off-the-charts transaction volume. Most payment gateway providers consider the following companies high-risk during approval:
- Online dating sites
- Travel agency websites
- Telemarketing sites
- E-commerce start-ups
- Gaming sites
- Gambling sites
- Payday loan companies
Factors to consider when selecting a high risk payment gateway
- Processing fees. Start by evaluating your business to know how much money can be processed monthly. You can then consider how much the payment processor charges per transaction and their monthly fee. It will allow you to pick the payment processor best for you.
- Mobile payment processing. Such payments include apple pay and google wallet. If you wish to receive payments from such accounts, have a payment processor that can process such payments. Being able to accept mobile payments will drastically improve your revenue margin.
- Countries the processor can operate in. processing fees for each country vary among different gateway providers. You may wish to work with a gateway provider who can operate in many countries. Such a provider will allow you to accept as many foreign currency payments as it can offer. A merchant account holder can also work with a provider with the cheapest foreign currency processing rates. This choice will come with having to sacrifice accepting payment from some countries.
Steps to obtaining a high risk merchant account
- You will first need to obtain a business license from your local government.
- Setup your business structure and set up a business bank account. Look for a local bank to collaborate with regarding your merchant’s business. Choose one that offers the most convenient rates and can quickly process payments.
- Identify the best credit and debit card brands to work with. Considering the location of your target customers will come in handy during your pick.
- See whether your bank accepts the payment models you will use for your business. Be it recurring or one-time payment methods.
- Provide your bank with the necessary documents that show your financial state within the last year. The turnover of your business will determine the rates your bank gives you. You will also need documents that show the level of risk of your business and the age and size of your business.
- Ensure you update your merchant website to ensure it complies with all requirements of your payment service provider.
- Submit essential documents to your bank regarding your business activities, tax returns, etc. These documents will vary from bank to bank.
- Fill in your application form and pay the required setup fee for your account.
- You can now begin to accept credit and debit payments.
Even as you enroll your business with a high-risk payment gateway provider, it is important to note that you may get rejected. Rejection is likely due to the risky nature of your business and overly strict rules from the provider’s end.
Before signing with any payment processor, research the one that provides the best and most affordable services. Please also remember to carefully read the contract to get the terms that apply to you as a high-risk merchant.