Looking for a plausible High-Risk Merchant Account in India, then you have reached the right place. HighRisk Gateways is a professional High-Risk merchant account provider in India that delivers reliable and secure payment solutions.
As a high-risk merchant, it may not be easy to get a competent and dedicated high-risk merchant account provider. Along with the frustration of facing shady providers who want to deliver you processing services but at a crooked price.
It can be predicted that a high-risk merchant has to pay higher processing rates and account fees. The assurances result in a longer term, and there may be early termination fees, and also rolling reserves. Regardless, this usual process should be anticipated because these providers are taking on significant risks.
What Is A High-Risk Merchant Account?
A high-risk merchant account is known as a payment processing service that is delivered to businesses that financial institutions have classified as riskier than ordinary merchant accounts. This is because of a higher volume of chargebacks, a history of fraud transactions, financial insecurity, and bad credit history, just to mention a few.
As formerly said high-risk merchant account in India has to pay more than average fees and have to experience more surveys to be authorized for payment processing services. This has to perform with a higher volume of risk included to the business and its industry.
High-risk merchant accounts may tend to a rolling reserve, which means the payment processor retains a certain percentage of your income to ensure whether the transactions were fraudulent or at risk of having a chargeback.
What Makes A Business High-Risk in India?
Eventually, the “high-risk” title will be provided by the provider. Payment providers have different criteria for considering a business to be a high-risk industry. The criteria for being labeled high-risk have to do with the chance for their transactions to be either denied or reversed. The industry also has to be one where it has found a history of higher rates of fraud and customer disputes.
Then there are the high occurrences of chargebacks. Generally, a provider requires businesses to stay below 1%. Any merchant that surpasses this amount will have to pay additional fees. Businesses can even have their accounts ceased.
For the industry, these are the aspects they look into:
- Credit risk: If industries normally experience uncertainty between payment and the delivery of the product, this is deemed as a higher risk. If the business is stuck before it can fulfill its order, the acquirer must take liability.
- Regulations risks: There are some regions of industries that are highly explosive due to rigid regulations. This uncertainty makes it challenging to keep any long-term business models, increasing the risk.
- Reputational risk: Banks have to safeguard their reputation. If they are at risk of harming their reputation due to providing services to the businesses with “scowled upon” industries, this brings significant risk.
Which Industries Are Considered To Be High-Risk?
The main aspects that will bring a business under the high-risk category have to do with the processing history and the industry’s reputation.
As earlier mentioned, the businesses are considered to be high-risk will mainly depend on the payment providers.
Here are some industries that typically fall under the high-risk category:
- Adult entertainment.
- Recurring subscriptions.
- Luxury goods.
- Online gaming.
- Tickets and reservations.
- Pharmaceuticals and cannabis.
- Multi-level marketing.
Implications for Being High-Risk
The cruel fact for high-risk merchants is that they will have to obtain a high-risk merchant account in India and with that comes higher-than-normal fees. Since risk is intrinsic in your business and providers do want to protect their interests, prepare yourself to pay higher processing and account fees.
There are some payment service providers that will ask you to pay a setup fee, a monthly and annual fee, and even a PCI fee. Make sure you read all the good print on your contract to prove that you are familiar with all charges.
Within some agreements, there are clauses where you will have to pay an early termination fee if you want to end your contract before it expires. Check to see that all of this information is clearly noted in your contract.
Another cost to be conscious of a high-risk merchant account in India is rolling reserves. They act as an extra layer of protection for the bank against chargebacks or fraud on your end. In the rolling reserve process, 5%-10% of the credit card processed volume will secure, preserve back for a depicted period, up to 6 months. The reserved amount discharges after that period.
You must be aware of the chargeback fees. These fees occur when a credit cardholder files for a chargeback, asking their bank to deny the charge. These fees shield the administrative costs involved with processing the chargeback.
Overall, all the fees associated with your high-risk merchant account in India may cost as much as double than paid by “low-risk merchants” but when your business processes a lot of transactions every day. Then you can bargain with your provider for more pleasing rates.
Perks of A High-Risk Merchant Account
The perks of a high-risk merchant account in India are as follows:
- It helps in trading globally. You will be able to sell products or services globally but it is not facilitated when you have a low-risk merchant account. So, it will provide you with long-term expansion.
- Increment in Profits. By having a wide range of products, you can boost the chances of earning more money.
- Chargeback Prevention. It will provide you with the possibility of keeping your high-risk merchant account in ideal shape. For example, when a merchant crosses the chargeback ratio with a regular account or it may end up with the ceased amount. They’ll have to look for a high-risk merchant account in India that provides you with a chargeback prevention feature.
- Expand Globally. If your high-risk merchant account offers the facility of accepting transactions in various currencies and selling services or products to customers internationally, then the performance of your business will improve. However, it means that you can access large markets.
How can you apply And Get a High-Risk Merchant Account in India?
After choosing a reputable high-risk merchant account provider, take the time to get a sample of their agreement before you fill out an online application. Ask questions if you have any concerns about understanding their terms.
When the acquiring bank originally authorizes your business for a merchant account, you will have to send the following supportive documentation:
- Incorporation certificate.
- Shareholders certificate.
- A copy of a recent bank statement that indicates the company name and bank account information.
- Merchant’s ID.
- If the business requires a license, provide the license number and the institution that issued that license.
- Proof of 6 months-worth of processing history (it should consist of total processing volume, chargeback ratio, the volume of transactions).
Do Your Research
High-risk merchants no longer have to fret about getting a payment provider to process their payments. With so many successful high-risk businesses growing and thriving, it is easy to get a good processor.
Do your researches, talk to sales representatives, and get various quotes before choosing the best provider for your business. Choosing the best high-risk merchant account provider is climactic to your business success. Aspire providers that have a demonstrated history of dealing with high-risk businesses. Make sure that there is complete transparency on their fees, terms, and conditions. Finally, ensure you find a provider with the best, responsive support on the market.