The Facts On High Risk Merchant Processing
High risk merchants can be classified as such for many reasons – one of those reasons may be your credit rating. Business credit ratings are based on your ability to pay back the credit owed to the credit card company or bank. Normally dictated by cash flow in addition to the willingness and ability of the merchant to honor obligation, credit ratings can be a tricky subject to talk about and deal with as a business. Thankfully, Allied Wallet is here to help.
Getting the Facts
Businesses that honor their obligations on time or keep the lender perpetually engaged will typically have a higher credit rating versus one that fails to pay the required installment, or fails to surface the loan. Credit rating is an important aspect for a business, especially for a merchant that borrows funds to finance various activities. Several types of businesses, due to the nature of what they are selling, are unfortunately considered to be high risk.
High risk merchant processing services are available for the types of businesses that are typically shunned by banks and other types of financial institutions. Service providers are, in general, flexible and accommodating to business needs.
High risk merchant processing is often shunned by mainstream financial institutions and banks. These banks consider high risk merchant processing too risky to handle, either because of the nature of the business or the bad credit rating. High risk merchant accounts are in this category, and the rate structure of the credit card companies typically demands a premium so that they can offset anticipated loss. This means the cost of the transaction will more than likely be a high one.
Why You Are Considered High Risk
High risk merchant processing services handle business categories in a different way. It is the norm to be turned away by one processor, only to be accepted by another. One factor that goes into whether or not your business will be accepted is the increased risk, especially if there is a higher chance of a fraudulent deal. Even if you, as the merchant, have a low fraud risk, you may be selling goods or services that are not cohesive with a bank’s or credit card company’s values. Businesses like the adult entertainment industry or gambling companies are more than likely to be excluded based on the somewhat illegitimate nature of their business.
Other high risk merchant accounts are not so readily apparent: online dating sites, credit repair, natural or herbal products, weight loss, and travel are oft-considered to be high risk.
What To Do If You Are High Risk
If you are a merchant that feels locked out due to restrictions placed on your industry by credit card companies, know that there are ways to still getting a credit card process service to accept you. You may also secure the services of a global or abroad unit to underwrite transactions. Keep in mind there is no subjection to oversight and regulation, so this could be risky.
Your best bet is to contact a company like Allied Wallet – we can help you get started by discussing your options for a high risk merchant account. Give us a call today!