There’s a significant difference between an entrepreneur operating a low-risk/ regular merchant account, and the one running a high-risk account. One of the headaches that come with venturing into a high-risk niche’ is how you’ll manage to convince a card processing company to accept you.
But what makes a company “High Risk”?
Well, because credit card processors want to make money with the fewest complications possible, any trait or aspect of your business that increases liability will deem it high risk. For example, if your industry has a bad reputation of numerous chargebacks or is a frequent target for card scammers, then you’re automatically risky.
The same applies to international companies and those that deal with highly regulated products like cigarettes and adult content. The point is; processors seek to avoid working with high-risk establishments or those that show a higher likelihood of financial failure.
How much can being “High-Risk” cost your business?
Cost of meeting compliance standards
First, it helps to understand that a high-risk merchant account comes with additional charges. You want to meet all local, federal & state standards to ensure your operations are not interrupted especially of your industry is known for high rates of injuries and fatalities. This means you have to spend capital on safety gear to stay in line with rules and regulations. Only after you’ve demonstrated full compliance can credit card processing
High-risks should also prepare for pay several insurance premiums. Insurances matter a lot for high liability companies. They limit your accountability, in case of an injury or problem. The market has numerous insurance plans, including;
- Those that protect the business and workers against customers
- Those that defend you from employees injured on duty.
Research to confirm what insurance product is suitable and economically fit for your business.
It’s true nothing is exciting about paying higher fees. However, these extra charges are more or less the cost of your business which happens to be high risk. And because you are spending in the skies, be sure to insist on quality all the time.
Author Bio: Electronic payments expert Taylor Cole is a passionate entrepreneur who enjoys to write, produce music, and travel. Bestpaymentproviders is the UK’s best skrill review company, serving both traditional and high-risk merchants.