A high-risk merchant account is generally associated with a merchant account that may accept credit card payment transactions. Still, it is considered a high-risk entity by various banks and credit card processors. A wide range of businesses can be an ideal example for high-risk merchants, such as telemarketers, a company that deals with e-commerce, merchants in the travel and cruising sector, internet auctions, and so on. The same-day merchant account approval is such a feature that enables merchants to get a ready-to-use merchant account for using purposes.
The setting up of a high-risk merchant account is because there are various factors that banks, and independent sales organizations consider before engaging in any form of transaction. The factors include the duration of the business working, the credit history of the owner and the industry, and the scrutiny of any preceding merchant accounts.
The ways to define an increment in the merchant account eligibility
However, there are various ways businesses can increase their offshore merchant account eligibility, which can provide excellent results if followed. The multiple ways to have an expanded merchant account eligibility are as follows:
- A Positive Credit Rating: A positive credit rating is attained by coming clean with any past bankruptcy, late payments, or liens from the credit report.
- It is transparent to the payment processor: Past financial transactions that deem transparency to the payment processor. The credibility of the method and enable one less barrier in opening a merchant account.
- The preferred Credit card processor: The preferred credit card processor depends on various factors that incorporate the choice in particular issues. These factors are both internal and external that may vary from person to person.
The Common Factors merchants should be aware of:
Various common factors are required by most people while opting for a high-risk payment processor. The most popular is same-day offshore merchant account approval that has been considered a critical element. The various types of factors that are about incorporating the aspects that they look into. The factors are as follows:
- Discount rate: This is the percentage of each transaction paid to the merchant account provider by the customer. If the monthly charges are less than a specific volume, the processor may charge a higher percentage, enabling a high discount rate for the customer.
- Transaction fee: This fee is a flat rate charged for each transaction processed for the business. This fee is a general benchmark as set by the high-risk payment processor.
- Equipment: Some of the examples of equipment may include a point-of-sale terminal, printers, and peripherals. Also, it is a process to find out about installation costs as well.
- Monthly minimum fees: These are the minimum fees that the merchant account provider collects each month from the merchant. This is done if the merchant’s discount rate and transaction fees do not add up with the monthly minimum amount. This is stated on the original merchant application, which the merchant can access.
- Reserve fees: It is always advised to set up a reserve account if the credit history is in question or if a new or high-risk business is in order. This enables a sense of protection of the processor from any future losses. The reserve account is estimated as a percentage of your sales which depends on the company policies.
- Chargeback fees: The chargeback fees are the costs charged by a processor to find the user on disputed charges. There are, however, various types of applications and software that enable the mitigation of these chargebacks in terms of fees.
- E-commerce: If you are an e-commerce merchant, it is essential to ask your prospective processor about the costs of storefront solutions. This has to be adequately operated by the websites and its anecdotes. These may include shopping carts, web hosting, payment gateways, virtual terminals, virtual checks, databases for fulfilling orders, customer tracking, and a way to calculate tax and shipping charges. The process of same-day merchant account approval is one of the reasons that customers opt for this type of account.
Seven tips regarding the approval of a high-risk merchant account
- Being aware of the cost
The user needs to know and understand all the costs involved in making and coming up with merchant accounts. Therefore, transparency is of utmost importance for these types of accounts.
- Find a service specialized in high-risk accounts.
The utmost important factor in selecting a high-risk merchant account and its factors is identifying and finding service-oriented high-risk accounts that are specialized to deal with these types of merchant accounts.
- Purchase equipment instead of leasing
Purchasing equipment instead of leasing them is a popular method of decreasing the cost for the business with time. In addition, proper utilization of the bought credit card equipment benefits the company in the long run.
- The identification of the processing needs
The critical factor in determining the needs of the high-risk processor is identifying the basic needs of the processor. This enables saving an adequate amount to be paid as fees and higher rates. In addition, determining the requirements of the processor allows for keeping the cost to the necessitates.
- Negotiate pricing based on the needs of the customer
Setting up a high-risk merchant account is a complicated process. Thus it is of utmost importance that the pricing is based on the needs of the business house and the customer. Deducting services and functions that are not needed by the business also deems to be helpful as well.
- Get e-commerce support
With most businesses shifting their market to an online platform, a high-risk merchant account requires tight and practical ecommerce support. A successful venture in finding one enables e-commerce to be a cornerstone for the business.
- Opting for a month-to-month contract
The safest option for a high-risk business is to opt for a month-to-month contract. This process is, however, tricky to render in the case of high-risk business. This is due to the presence of risks like a business.
The seven above tips regarding the approval of a High-risk Merchant account enable the customers to have a clear understanding of the nook and corners of the procedure and same-day merchant account approval.