What Happens if You're Labeled as a High-Risk Merchant

Merchant services, like payment processing, are vital for businesses today. Whether you’re a brick and mortar business or you conduct most of your business on the world wide web, the ability to accept multiple forms of payment enables you to remain competitive in today’s global economy, as well as locally in your community. Being flagged as a high-risk merchant can affect your ability to accept a variety of payments or greatly influence your costs in doing so. This guide will help you understand what you can do if you’ve been identified as a high-risk merchant.

What is a High-Risk Merchant Account?

High risks merchant accounts are those that pose greater financial risks than many ordinary accounts. Sometimes, knowing how to avoid getting a high-risk merchant label isn’t enough. It’s the nature or industry of the business that identifies you as a high-risk merchant. For instance, if you’re in one of the following industries, you may be identified as a high-risk merchant, automatically:

• Online Gaming

• Adult products

• Bail bonds

• Debt services

• Home-based businesses

• Firearm dealers

• Timeshare

• Travel services

• Telemarketing

Sometimes, you’re identified as a high-risk merchant because of past issues, including your personal credit history, business financial information, having a high risk of chargebacks, or being in an industry with an elevated risk of chargebacks, or any other number of reasons. The real question is, how do you respond if this happens to your business.

What Are Your Options for High-Risk Merchant Account Services?

Regardless of your status as a “high risk” merchant, you still need merchant services to keep your business going and to ensure that you can accept a wide enough variety of payments to satisfy the needs and demands of your customers. These are a few things you need to do if you’re identified as a high-risk merchant:

• Be upfront when shopping around for merchant service providers. Tell them the truth about your business so you can find the one that will work best for you in the long term.

• Provide a history of previous merchant services. This lets the service provider you’re considering know what your history looks like, so they can help you choose the program that will best meet your needs.

• If you’re new, consider renegotiating for better terms once your business is more established.

• Prepare yourself for the possibility of restrictions such as higher fees, reserves, and ACH delays.

• Expect stricter monitoring by the processing provider. You may also experience volume and chargeback caps.

• Understand and relate your needs for processing, including things like credit card terminals, POS systems, mobile acceptance, online shopping cart services, etc.

• Manage your chargebacks. You can work to reduce your chargebacks in a variety of ways including checking for customer identification, verifying credit card expiration dates, etc.

Doing these things may not eliminate your status as a high-risk merchant, but they can help you get the payment processing capabilities and other merchant services your business requires.

Choosing the Right High-Risk Payment Processing Services

It’s never a bad idea to shop around and explore your options when looking for a payment processor or merchant services provider. The better you know what your needs are, the better able you will be to pinpoint the service that has the most to offer you. Make sure you ask key payment processing questions to understand important details including what your payment processing options are, what kind of products and services will be available to your business, what types of fraud protection and data security tools are offered, and what the contract agreement structure is.

At Zenti, our goal is to bring you the most robust merchant services selection possible with billing that is transparent and easy to understand. We offer a variety of services and products to help you manage non-cash customer payments month-to-month, with no long-term contracts. We have products that will help your high-risk merchant account business today and as your needs evolve over time. Contact us to learn more about the payment processing services we offer and more.