Businesses classified as “high-risk” need an effective solution to accept payments, and providing it can help you grow your business.
Accepting digital payments has become essential for businesses. It allows them to capture sales from a broader range of customers with different payment preferences. Additionally, digital payments enable merchants to process transactions quickly and securely, making the buying experience convenient for their customers. Accepting digital payments also gives merchants real-time visibility into sales volume and provides data they can use to enhance customer experiences and optimize processes. Of course, it also decreases challenges associated with cash management, including security concerns when transporting daily deposits to the bank.
However, some businesses are classified as high-risk merchant accounts by card brands, and they may have experienced difficulty getting approval to accept digital payments. Worse, they may have established an account, but their provider may have suddenly dropped them, leaving them with no way to take card or mobile wallet payments.
Reasons businesses can be “high-risk.”
Some businesses are classified as high-risk simply because of the types of business they do. Betting shops, dating services, video game arcades, and bicycle shops are just a few examples of industries that card brands have determined are high-risk based on the risks and losses they see there. Risk classification is largely based on the number of chargebacks a business is likely to have. An increased likelihood of fraud will also earn a business a high-risk rating.
However, even if the merchant isn’t doing business in those categories, their individual history with chargebacks and fraud can change their designation to high risk. Furthermore, no history can work against a merchant. A new business may be considered a high-risk merchant account because they haven’t established a record of minimal losses.
What high-risk means to a business.
If a business is classified as high-risk, it isn’t immediately barred from accepting digital payments. The first consequence, however, is usually having to pay higher payment processing fees. They may also need to set up rolling reserves in their merchant accounts as collateral to cover fees and potential losses if fraud or chargebacks occur.
Certain regulatory bodies may impose additional requirements depending on the business's merchant account risk classification. This is typically determined on a case-by-case basis. If a business does fall into this category they can still process payments, they will just have increased reporting requirements.
The advantage of partnering with North American Bancard.
Although a “high-risk” designation sounds like a warning to sales partners, North American Bancard sales partners know high-risk merchant accounts can also be high-reward accounts, particularly when you have a partner who has your back.
After investing time and resources into selling a business on your services, the last thing you want is to have that merchant declined. North American Bancard reduces that risk with in-house underwriting with high approval rates and faster application processing.
North American Bancard also offers highly competitive rates to help you offer them the best pricing package possible.
You can also help high-risk businesses control losses with North American Bancard’s best-in-class fraud and chargeback mitigation tools. With in-house support, your clients can resolve chargebacks, representments, and customer inquiries quickly and keep their focus on their core business responsibilities, like enhancing customer experiences and increasing sales.
“High-risk” merchant accounts can be great customers
Remember, a “high-risk” merchant classification isn’t a negative reflection on your prospects. They can be great customers who need an effective solution to overcome challenges they may experience with digital payment acceptance.
Providing them with that solution can help you grow your business with good relationships with companies that see you as a trusted business advisor.
Contact us to learn more about solutions for high-risk businesses.
