As a merchant, there are numerous things to check off on your to-do list before starting to run an online business. However, arranging a way for your customers to checkout and pay is not as simple as saying it. Even, selecting a payment processor to process online transactions takes time and research.
Here is a handy guide on high-risk payment processors and acceptable payment methods.
All the High-Risk payment processors are not the same, but they have their areas of specialization where they can meet the requirements of particular businesses.
Define High-risk Payment Processors
A payment processor categorizes a merchant account high-risk if they have found your business at higher risk of chargebacks, frauds, or a high rate of returns. There are various reasons and this could be the scene – that you are a new merchant who has not processed payment before or because your business type is considered high-risk and has a nature of fraud. High-risk merchant accounts have to pay higher processing fees for this risk. Generally, if an online business accepts credit cards, it requires a high-risk payment processor.
High-Risk Payment Processors Means Higher Fees
Every credit card processing platform is different in many ways. But high-risk merchant accounts will tend to pay higher fees around the board. Usually, processing fees for all transactions will be higher, sometimes more than double that of low-risk merchant accounts. Whereas, low-risk merchants are also paying a chargeback fee but high-risk merchants have to pay higher chargeback fees.
A high-risk merchant may have to lock into longer contract terms, an early termination fee, or a monthly or annual charge. High-risk merchant accounts may also tend to a rolling reserve, where the payment processor pauses a certain percent of your income until it can verify your transactions were not fraudulent or at higher risk of chargeback.
What is a high-risk industry?
High-risk industries have irregular, high-volume sales and a large number of chargebacks or work in highly restricted industries or the rules & regulations are not clear at best. It can be caused by poor credit records, being outside the US, or not meeting particular standards.
So, here are some examples of high-risk industries.
- Tech Support companies.
- Tobacco sales.
- Offshore businesses.
- Call centers.
- Travel agents.
- Health and supplements.
- Online gaming.
- Debt collection.
- High ticket items.
- Adult entertainment.
- Payday loan companies.
What is the main advantage of high-risk payment processors?
One of the main benefits of high-risk payment processors is that it is safer. High-risk payment processors use different kinds of security measures to assure the safety of the merchant’s data, which consists of firewalls and SSL. So, high-risk payment processors also help in fraud prevention, which reduces the high level of chargebacks when merchants are not at high-risk.
High-risk payment processors also help to process international payments, making it easier for customers living in different countries to make purchases with fewer hurdles.
The Importance of high-risk payment processors for E-commerce:
eCommerce businesses are constantly spreading, and the high-risk payment processor is an essential component for any eCommerce business. This gateway ensures high-level security for your customers, also provides the best performance.
High-risk payment processors ensure that your customer data stays safe when you enjoy fast processing with no delays. However, the cost of this service may be higher than others, but it’s well worth the investment. However, it will save your money in lost business opportunities by preventing transaction errors.
The high-risk payment processors work by dividing your customers into high and low-risk categories. So you can use a single interface to make rules and apply them according to high or low-risk transactions.
Moreover, high-risk payment processors work as a bridge between your website and the payment processor. It can develop reports on another side to enhance customer service.
How do you select the best high-risk payment processor?
There are three main factors to consider when selecting the best high-risk payment processor: Processing Fees, Gateway’s countries, Mode of payments. Yet, all these factors depend on your business.
First, you will have to analyze your business for what kind of payment gateway it requires. So, this consists of looking at how much money is processed every month. Because as large the company, as higher the processing fees.
Second, you will have to look at which countries your company operates in. If you have your targeting customers in more than one country or selling internationally. Then you will need to ensure that your payment processor has global coverage. Lastly, if you provide mobile payment modes such as Apple Pay, ensure that your payment gateway provider’s services include this.
Moreover, businesses can pay a discount rate when they process over a certain amount of money in a month. This is a perk for companies to process more money each month with the same payment processor. So, if this fee applies to you, ensure that the discount rate is not too high. You must process enough money monthly to make up for the discount rate not to pay more than with other payment processors.
Next, you will need to compare the fees of each payment service provider charge. However, you can do this by looking at how much they charge per transaction and their monthly fee.
Before choosing your payment processor, one final consideration is whether they provide mobile payment modes such as Apple Pay or Google Wallets. If you accept mobile payments, you must ensure that your payment processor can process them.
So, if your business requires a high-risk payment processor. Contact HighRisk Gateways.
Services | Payment Gateway
- Customer Vault. Store securely and use tokenized customer details from prior transactions, essential for businesses with recurring revenue models.
- Automatic card updater. Handles a complete history of payments made by customers and offers seamless synchronization with card-on-file data.
- Electronic Invoicing. Customers can get invoices by making a few clicks.
- Fraud Prevention. You can get enhanced protection against fraudulent transactions on some rule-based parameters.
- iProcess mobile payment modes. With mobile apps for Apple and Android, merchants may accept EMV card payments on mobile phones.
- Automatic Level III Processing. Level III fees are applied to all card-not-present transactions for merchants who use the enhanced data service.
Advanced security features
- Point-to-point encryption. When it comes to payment processing, point-to-point encryption is the most secure and amazing encryption technique available, ensuring that customer details are never exposed during a transaction.
- Remote key injection. It is meant to be an instant and secure payment terminal key injection at the point of sale with a low cost-effective alternate.
- Terminal management system. Manage your payment devices from any location, which includes remote firmware updates required for security.
As we have discussed, there are many reasons why your business can be considered high risk. But if you get a high-risk merchant account through a reliable payment service provider, then the process will be simplified without headaches.
There are businesses with a higher risk of chargebacks. Obviously, they come with more strict terms and conditions. Moreover, when you accept payments through reliable high-risk payment processors that keep security at the priority. You can relax and be assured that the risk of chargebacks and frauds will be minimized. For further information on payment processors, you can talk to the HighRisk Gateways customer support team about what kind of charges are involved, which countries are supported, and whether they provide mobile payment modes.