There are certain business types in the business industry that can be considered as risky. Some companies that provide card processing have turned down merchants because they have been considered as high-risk merchant. The good thing is that there are still companies that accept high risk merchant account processing.
A company has certain guidelines they use in order to come up with the decision on whether or not to accept you. The lesser strict those guidelines are, the higher chance you have to gain a high-risk merchant account. Another way is to find a provider that specializes in creating account for high-risk merchants.
What is a high risk merchant account?
It is an account used for the processing of credit card. It is an alternative way that high-risk business found in cases the bank has closed their previous accounts or has considered their business as too risky.
What makes you a high risk merchant?
- The main reason for you to be a high-risk merchant is if you have a high-risk business. Service providers have their own way of measuring how risky your business is.
- Another reason could be that the industries you belong have very high cases of fraud or have higher chargeback from other industries. The chances are, the providers would not accept your application.
- Another one might be because you have a bad credit, low credit score or just starting up your business.
- Another case is if the business had a bankruptcy history.
- Another reason for your business to be considered risky is if your previous merchant account has been terminated by the bank.
- Businesses whose clients and products are delivered internationally are also considered as high-risk. The main reason for this one is that they have an international client base. So if you are selling CBD oil online, you will need a high risk CBD merchant account
In other words, there are several reasons for providers to consider you as high-risk. Providers also choose the business they want to deal with because they are also afraid to lose money from doing business with you.