There are several small business organizations and small business owners who have never come across the term high risk merchant account. And one thing is that they (small business) cannot identify their business as high risk until they find it out by some source or as the case may be. From the point of view of the merchant providers, it is more often a sign that there is a greater risk in your business for chargebacks. And another factor in high risk merchant account is that it has got nothing to do with how you work or how your business is performing.
High Risk Factors
Now, there are many reasons as to why some of the businesses are defined as high risk merchant account. Now, if you understand this then it will further help you to understand how the merchant services work, and through this, you can identify one of the best payment processing team to work with your business. There are some factors which can simply make your business a target for high risk and some such factors are as follows –
Work from home, now in this the location of your work really matters a lot. A home-based business is at more risk plans for the payment processors. And for this purpose, if you do business out of the country then this can put you as a high risk merchant account. So, you should keep in mind while doing any kind of such transactions, etc. Then another important thing is the duration of time in which you have been in business. Then, your past with other merchant accounts also matters. All you should do is keep your records and be genuine when you are into shopping for a novice merchant partnership. Then comes, the rate of chargebacks, much cannot be said about this topic, but is advisable that you avoid the chargebacks as much as possible.
Create Policies
Also, one of the most important things while using high risk credit card processors is that you have to create strategies to solve various kinds of customer problems, plus, offer refunds, and also communicate very well with your customers to avert them. It is also possible that you are working in the area which is one of the identified high-risk trades. From the point of view of payment processing partnership, some trades are riskier than others. Also, you have to improve your credit, so that you become more satisfactory risks for business associates to accept.
Impact on Your Business
For example, if you are selected as a high risk merchant account, it would mean that your account will have to go through, extra inspection, so that you can get the merchant services. It can also happen that limitations can put upon your number of transactions per month, also are required to have a certain amount of cash reserve. And in many cases, it can happen that you will have to pay higher charges or processing rates, so that you can get varieties of merchant services due to the high risk position. And it may happen that some providers would deny working with you.
