High-Risk Merchant Account – How to Avoid Account Termination?

What is merchant account?

A business account in which the financial institution allows the account holder to accept payment through online money transactions using credit/debit card is called a merchant account.

What is high-risk merchant account?

The merchant account with a high risk like frauds in transactions is considered as a High Risk Merchant Account. When such risks the involved the merchant bank charges high premium and also charge extra fees for their services and card networks charge to try and minimize the risk involved.

When are you high-risk merchant?

Following are the few possibilities when your account is considered a High-Risk merchant account:

1. If you start a brand new business, there is no previous online transaction processing history.
2. The reputation of the business, if the business is anytime previously known for dissatisfaction of costumers, transaction frauds, etc.
3. Low Credit Score, you are considered a high risk merchant if your credit score is low as there are possibilities that you find it hard to repay your negative balance.
4. Service Provision, if in case there frequently is a lengthy time span for your business to provide proper service or deliver a product to the costumer, your business may be categorized as high-risk.
5. Transactions over phone, if your business uses a virtual medium for transactions this causes the costumer not being aware of details.
Along with all these there are a few more criteria’s of getting a status of high-risk merchant account, like- Chargeback History, Frequent refunds, Automated Billing, etc.

Which type of businesses are included in High-Risk Status?

Following is the list of High-Risk Merchant Consideration-
1. Adult Entertainment
2. High Volume Transactions
3. Pharmaceuticals
4. Travel and Lodging
5. Gaming
6. Marketing through network
7. Firearms and so on

How to avoid?
There are chances depending on the reputation on your account, the account may get freezes for a short span or permanently in which you cannot have any transactions in this account.

The best way to avoid all these problems is to be completely upfront and honest in the Merchant Account Application about the services and products you will provide the customers through your business.

WHY SHOULD YOU OBTAIN HIGH RISK MERCHANT ACCOUNT SOLUTIONS FOR FOREX BUSINESS?

Forex is one of the largest markets in today’s financial world with the average daily trading turnover being $5 trillion. Growing market means new traders entering the market every day along with brokers and businesses offering forex platforms and services to these clients.

With the introduction of new technologies, the way trading is done undergone change and the market has become more competitive for the merchants too. One of the advantages wherein a business can gain significant leverage is by offering their traders options in terms of accepting credit or debit cards while trading.

A Forex High Risk Merchant Account has become an absolute necessity for merchants that have clients trading on their trading platforms.

Of course, obtaining a merchant account for forex businesses is not so easy. Being a high risk industry, one of the many difficulties that these merchants face is the difficulty in finding a secure bank or merchant account.

Challenges In Getting A Forex Merchant Account

The risky nature of the industry is a major factor in banks and processors shying away from the business. Forex businesses are governed by strict rules and regulations that they must adhere to. They are subject to heavy regulatory scrutiny and require proper licensing presenting a challenge in obtaining a regular Forex Merchant Account.

Another issue is the high number of chargebacks associated with the business. Forex businesses are often faced with a number of challenges and conditions that a regular merchant would not usually face.

Leverage your Forex Business with High Risk Merchant Account Solutions

Apply for a Forex Merchant Account

The faster pace of forex markets requires equally fast and efficient payment processing system. With the advancement in technology, such payment processing options are being made available to the merchants. Mobile payments, E-wallets, debit and credit cards, etc have become the preferred mode of payment that has been adopted by customers as well as merchants for speedy transactions.

When applying for a high risk merchant account for your forex business, ensure that your business has a license. Without it, you may face further complications in your application process.
A long and positive processing history (minimum 3-6 months) ensures business stability and profitability which increases your approval chances.
As a risky business, forex merchants need to avoid any and all kinds of suspicious activities relating to your business. A lower chargeback ratio is also necessary.
Along with obtaining high risk merchant account solutions, forex merchants should also integrate 3D Secure Payment Gateway services for safe and smooth transactions.

These key points are important to fulfill in order to increase your chances of approval when applying for a forex high risk merchant account.

If you are looking for high risk merchant account services for your forex business, IBS is a top-rated merchant account provider specializing in high risk verticals with over 95% merchant approval rate.

How To Choose The Right CBD Merchant Account Provider?

Major shift towards plastic money in recent years means businesses cannot afford to continue accepting payments in cash only. Variety should not just be limited to services and products offered by a business but also payment options.

In order to accept credit cards, you need a merchant account. Now obtaining a merchant account is fairly simple unless your business comes under the high risk category. And if you are a merchant selling CBD, you are almost guaranteed an outright refusal from a regular bank or processor even though you operate in a lucrative industry worth millions which is only expected grow further and predicted to reach 1,182.65 million by the end of 2024 at 31.26% CAGR.

Not all hope is lost because there are several reputed merchant account providers who are willing to take on your CBD business. But how do you choose the right one for you? Here are a few tips to follow while looking for a CBD Merchant Account:

Payment Options –

While credit card processing is an obvious choice, it is not the only choice of payment. There are several payment options that you can opt for when looking for a CBD Merchant account.

You also need to consider what suits your business the best. If you are a CBD store planning to expand into the e-commerce space in the future, you need to look for online payment processing solutions. So before settling on one, make sure they offer all the possible options you might need so you don’t have to waste time looking for another one in case your current provider isn’t enough.

But if you only need a POS Terminal to accept payments, you don’t want to end up paying for extra services you don’t even need.

Apply for a CBD Merchant Account

Additional features –

Chargeback protection tools, fraud prevention measures, PCI DSS compliance, 3D secure payment gateway, etc are some of the important features that a CBD merchant account provider should be able to provide. You will need a provider who will be willing to offer features that are customized to suit your business requirements.

Charges –

When you approach a processor for a CBD merchant account, they will shoo you away or charge unreasonable rates. Most merchants in a desperate attempt are then forced to pay higher processing fees.

Now bear in mind that you will be charged higher than other non-risky businesses. However, it also becomes important to negotiate in such cases. Different processors offer different pricing plans based on the kind of business you are and the type of payments you receive. Compare the prices of several other processors, understand the rate structure and only then settle for the one who offers the best services at a fair price.

Specialized Processor with stable bank partners –

Since CBD merchants deal with legal matters on the regular, a processor who is experienced and understands the industry will prove to be a helpful partner in the long run. They will also be lenient and are more prone to accepting your merchant account application.

Customer Support –

Effective and reliable customer support is important regardless of the type of business you operate. But it becomes all the more important in case of CBD business who deal in large processing volumes regularly. In case of any emergency, good customer support will provide solution on time.

Obtaining a CBD merchant account might be a task but keep in mind these tips and you might actually end up finding one that will only assist you in growing your business further.