Today, very few people pay by cash - most of the transactions are done by card as it is way more comfortable for the customers and the cashiers. The latter don’t have to worry about spending hours counting the income for the day, while the former doesn’t have to carry around money.
That’s why more and more businesses decide to create merchant accounts, which allow them to accept credit and debit cards. Usually, the companies apply for a low risk merchant account. However, not everyone gets the approval - some of them get rejected, and they fall into the high risk category.
Even though at the beginning it might seem like a disaster, it’s actually not so bad. If you ask a high risk merchant account provider, they will tell you that it has more benefits than you can imagine. Some of them include:
- A chance to get back into the game - most of the companies that apply for a high-risk merchant account have experienced some financial problems in the past, which caused them to fall into debt. A high-risk merchant account can help them to get back into the game, and start making a profit again when other financial channels might not really be available to them.
- Possibility of global expansion - in contrary to traditional merchant accounts which are restricted to transactions only in the parent country, high-risk merchant accounts have no limitations and can transact money as they please, no matter the currency which gives them a real possibility of a globalizing their business
- Absent volume caps - ubiquitous in traditional merchant accounts; high-risk merchants don’t have to worry about a target volume per month, which means that they can easily transact as they want
- Lower chance of account termination - if a traditional merchant will experience a more significant amount of chargebacks (more than 1%), their account can be terminated; that’s not the case with high-risk merchant accounts as the providers know beforehand that it can happen, so they’re safe, and their account will not be terminated due to a high chargeback rate. Though it is a good idea for high-risk merchants to educate themselves about chargebacks and what is chargeback fraud.
- Elevated security standards - most of the high-risk merchant account use strategies, thanks to which they are able to identify if the card used is legitimate, or if someone is trying to scam them. After all, the less deceitful transactions, the better your company will be perceived by potential clients. This benefits not only the business but also the account provider as well as the card owner from falling victim to fraud.
- Easy set-up process - when it comes to the high-risk merchant accounts, the application process is quite easy and usually can be done online. The businesses which apply for this type of account, generally get the approval within 24 hours.
There are businesses that, from the beginning, are considered as high risk, no matter how well the company is doing - for example, collection agencies. If you’re curious about how you can open a collection agency merchant account, check out the infographic provided by MyPaymentSavvy.