6 Tips for Delaying Payment on High-Risk Credit Card Processing

High-risk credit card processing poses a major risk to any business that accepts them. While some high-risk cards, like charge cards for businesses with stable revenues and reliable cash flow, pose little danger. Others, like business credit cards and trust accounts for smaller companies, may not pose as much of a threat but still place your business at high risk when you take on their payment processing services. In this article, we’ll discuss the dangers of high-risk credit card processing and how delaying payment is one of the best ways to avoid it.

What is High Risk Credit Card Processing?

High-risk credit card processing poses a risk to any business that accepts them. High-risk credit cards pose the risk of high chargeback rates and/or high fees. The fees charged on high-risk cards are usually higher than those charged on low-risk cards, meaning they are more expensive to accept and carry an even greater risk for your business.

Why Delaying Payment is Important for High-Risk Payments

Delaying payment is one of the best ways to avoid high-risk credit card processing. There are many reasons why you may need to delay payment, and some of them will be discussed below. First, if a business finds themselves in a financial crunch and can’t afford to pay for high-risk credit card processing services, they should delay payment until their financial situation improves. When it comes to high-risk credit card processing, you’re taking a significant risk when you accept payments from these cards. If you cannot afford this risk, then you should wait until your financial situation improves before continuing with the transaction. Next, if your business has experienced an interruption in its normal operations or has been hit with unexpected expenses, it makes sense to delay payment on transactions that are likely to generate future profits because those transactions carry an increased level of risk when compared with other business transactions. For example, if your company has suddenly had to close due to severe weather conditions or an unforeseen natural disaster that left employees without work or homes damaged or destroyed, it may be better to wait until the company reopens before continuing with a transaction that could potentially result in a loss.

Consider delaying payment for the following cards

Just because you are processing a high-risk card doesn’t mean it is automatically a risk for your business. For example, if you accept Visa cards, which are the most common type of card used in the United States, then you are not at risk because these cards have lower credit limits. In fact, payment processing services like Visa make it easier to accept a number of different types of cards without putting your business at risk. Many businesses show a higher profit margin when they process low-risk cards like debit or credit cards with larger credit limits than high-risk ones. If your business is willing to take on more risk than usual, then consider delaying payment for the following cards:

Delay payments for low-risk credit card payments

It’s important to recognize that delaying payment is not an option for the majority of high-risk credit card processing. It’s a tactic that can only be used in certain circumstances with low-risk credit card payments. There are two common scenarios where you might delay payment on a low-risk credit card: 1) You’re negotiating with your customer after they make an oral request for a refund. 2) You’re trying to collect unpaid invoices and don’t want to risk losing the business from interest charges or legal penalties if you push the payment too far back on your sales cycle. These are extreme situations, but it’s possible that you’ll have a situation where you must delay payment when dealing with a high-risk credit card processing service. In these cases, it’s important to negotiate as much as possible and put pressure on the individual handling your transaction. This will help you get the best terms without being forced into paying more than what you should have to at this point in time.

Don’t delay payments for high-risk credit card payments

To avoid high-risk credit card processing, you simply have to be cautious. In particular, you should pay attention to the threat of fraud that may occur with these types of cards. It is often seen as an opportunity for criminals to steal your financial information and use it for their own purposes. Unfortunately, this is exactly what occurs when you delay payments for high-risk credit card payments. This type of fraud can occur when a business takes on the payment processing services of a company without doing their due diligence beforehand. This can backfire because if fraud occurs, your business will have to cover any damages from the transaction or even pay for any losses personally. By delaying payments on high-risk credit card processing deals, you are actually increasing your risk for losing money in this way.

Final Words

High-risk credit card processing poses a major risk to any business that accepts them. While some high-risk cards, like charge cards for businesses with stable revenues and reliable cash flow, pose little danger. Others, like business credit cards and trust accounts for smaller companies, may not pose as much of a threat but still place your business at high risk when you take on their payment processing services. In this article, we’ll discuss the dangers of high-risk credit card processing and how delaying payment is one of the best ways to avoid it. Delaying payments for high-risk cards can help you keep more money in your pocket by increasing your cash reserves. This can be beneficial because you won’t have to pay out what you don’t have to spend. You’ll also have time to collect other funding options before you incur any additional costs or penalties due to late payments. The key is having enough money in reserve while keeping the amount of outstanding payments low enough so that the business doesn’t accrue any newer fees or penalties.

FAQ’s

What are the dangers of high-risk credit card processing?

The dangers of high-risk credit card processing can be found in numerous ways. First, you open yourself up to potential fraud by allowing a business card to be used for payment.

In addition, high-risk credit cards often have more stringent approval requirements than business cards, resulting in a higher approval rate that also results in higher fees for approval and transaction processing. (dual approval). It is easier for thieves to gain approval for business cards which often result in a challenge fee.

Finally, high-risk credit card processing carries higher fraud liability than low-risk credit cards because the number of chargebacks increase the amount of time it takes to earn the liability back. When that combined time exceeds the term of the contract, it’s considered fraudulent use and can result in a chargeback being filed against your business (both paypal and credit card).

What are the consequences of not paying a high-risk credit card bill on time?

The consequences of not paying a high-risk credit card bill on time can be severe and costly, especially if the company begins to fall behind on their payments.

First, they are at risk of seeing their credit score lowered as a result of the delinquency. In fact, if they fail to make all of their monthly payments they may even see their credit score lowered to just above default.

Secondly, they will likely be slapped with a higher interest rate on their balance. This will likely result in thousands of additional dollars in interest charges over the life of the loan.

Thirdly, should the company default on the debt due to a bankruptcy filing or insolvency situation, then they will be subject to potentially large collection and attorney fees fees as part of their liquidation process.

How can you identify a high-risk credit card?

There are a lot of high-risk credit card processing options, but a few that may be the most risky for businesses to accept are trust accounts, business credit cards, and merchant credit cards.

Trust accounts are typically offered by third-party payment processors as a way for businesses to accept credit card payments from customers without having their own merchant accounts. These accounts charge a much higher processing fee than individual merchant accounts, so businesses rarely use them unless they have extremely high revenue or have run into processing problems with their individual merchant accounts.

Business credit cards and merchant credit cards work similarly to trust accounts in that both allow businesses to accept payments from customers without having their own merchant or business accounts. However, these cards come fully processed with the features and benefits businesses need, like fraud protection and vendor management tools such as discounts and loyalty programs. As a result, business credit cards often come with expensive annual fees that can be difficult to cancel if they aren’t used.

Merchant credit cards are similar to trust accounts in that they allow businesses to accept payments from customers without having their own merchant or business accounts. However, unlike trust accounts, which come at a steep discount to individual merchant account fees, these cards often start out at similar rates before eventually getting more expensive depending on how many transactions they process per day (and thus how much they’re used).

High-risk credit card processing poses a major risk to any business that accepts them. While some high-risk cards, like charge cards for businesses with stable revenues and reliable cash flow, pose little danger. Others, like business credit cards or trust accounts for smaller companies, may not pose as much of a threat but still place your business at high risk when you take on their payment processing services.