To start with, your business may be one of those categorized in the high-risk industry. Companies in this category are considered to be at high risk due to the fact that they suffer too many chargebacks or incur unusually high chargebacks. In addition, some of them are also subject to reputational or character risk as well. The industries listed below are few instances among many which have a notorious reputation for their high-risk background:
• Online dating and adult industry
• Tobacco, cigarette, and e-cigarette companies
• Financial services together with credit and debit –allied services
• Real estate/property development
• Weapons
• Multilevel / Network Marketing
If your business is not home-based and you are running it outside your home, or maybe you are running it from an online store like eBay, Google, and Amazon, then you will probably require a high-risk merchant business bank account. In general, any business enterprises that depend on yearly membership subscriptions and renewals are under surveillance too. Service providers would rather deal with companies which are secure because they are a lot less likely to cost them a fortune.
You might be a high-risk business
When you are experiencing problems despite the fact that you aren’t operating in a high-risk industry, you could be possibly regarded as a high-risk merchant. The greatest difficulty is usually poor credit rating, although there are other reasons which may influence the decision. When you engage in questionable promotion or marketing strategies, you might encounter difficulties in getting a credit card processor. Running an off-shore business presents an equal danger.
In case you’ve in the past managed a business which had had its credit card processing services annulled, you would be listed on the TMF (Terminated Merchant File). The TMF is a massive database, to which you are immediately added where your business will remain listed for five years. You might have experienced excessive chargebacks, contravention of your contractual terms, or engaged in fraudulent activity. Regardless of the cause, this record will tag you as high-risk.
A high-risk merchant account is certainly not the worst that could happen to you
While you’ll encounter difficulties with a few merchant account providers, few service providers are experts in high-risk merchant business bank accounts. But keep in mind that merely because one service provider did not regard you as high risk does not imply that another will not. Being a high-risk merchant, you’re very likely to be given higher rates and tighter contractual conditions. Does that mean you should jump at the first probably good offer thrown at you? Certainly, no; not without thoroughly reviewing the contract.
There are numerous providers that exploit high-risk merchants by presenting predatory contractual offers. Some well-respected high-risk merchant account providers include Vintage Payments, Host Merchant services, Payline, and Durango Merchant Services.
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