If you’re just starting out, or you’ve hit a rough patch in your business, you might be only have access to high risk merchant accounts when you’re making applications to switch payment processors. If this has happened to you, there are a few things you need to know about what it means to be high risk and how to deal with that status. If you follow the advice in this guide, your high risk status might decline over time, leading to better rates and a decrease in operational expenses.
Being classified as a high risk merchant won’t disqualify you from credit card processing, but it does involve some concepts that will impact your business finances.
There are a variety of reasons why a company might consider you a high risk for credit card processing. If your business is offshore, or it’s in the adult industry, you might automatically be considered high risk. Some providers are more risk averse, so the criteria changes depending on who you talk to.
High risk basically represents the chances you have of defaulting or losing the merchant account provider any money. Even if you’re high risk, you can still find businesses that will provide reasonable rates to work with.
High risk doesn’t mean you need to take the first account that comes to you. There’s a good chance you can still find a reasonable rate, just higher than the market average. You should still look for benefits related to your business, and nothing about funding times should change. If you have questions, your best option is to talk with multiple providers and see what they can do for you.