Processing Solutions for High Risk Industries

If you fear that your business falls into one of the higher risk categories when it comes to merchant services, fret no more. While there are certain disadvantages to being a part of this classification, there are also many good solutions available to you. Before you worry, though, figure out if you really have any reason to be concerned about being labeled this way. There are several factors to consider here.

Card Not Present

The most common reason that a business is high risk is that they are accepting credit cards by phone or via the internet, rather than in person. Card-not-present transactions are particularly fraught with security risks and the potential for costly chargebacks. When you cannot verify the customer's signature, view the card itself to check for alterations, and otherwise evaluate the authenticity of the Visa, Master Card, American Express, or Discover, you risk accepting a stolen one or having a customer charge back the value of an item because you cannot prove that the purchase was legitimate. As a card-not-present merchant, you can expect higher fees, but there are still numerous types of solutions available to you.

Certain Industries

Morally ambiguous industries are also subject to this high risk classification from merchant banks. Hotels, Vacation Packages, Motel Industry, Inns, Cruise Companies, and tour operators are all seen as chargeback headache for card processing companies. They are also subject to an increased prevalence of chargebacks from embarrassed or dissatisfied customers. Our service can help you find a bank that specializes in working with merchants like yourself so that you can begin accepting credit card payments safely and securely.

Pay In Advance

Businesses that ask or demand that their customers pay far in advance of receiving services or merchandise are also subject to being classified as higher risk by merchant service providers. This includes agencies and related businesses like hotels, motels, and airlines. Chargebacks are a common problem in these types of companies, and so merchant banks protect themselves by increasing fees and surcharges to make sure that processing for them is financially responsible.

Bad Credit Businesses

If you or your company has a history of bad credit, failure to pay bills and other expenses in a timely manner, bankruptcy, or other markers that indicate fiscal irresponsibility, card processors may be hesitant to work with you. For one thing, they expect a long-term contract to be fulfilled when you sign up, usually demanding that you sign on for one, two, or even more years. If you have a history of late or non-payment on other monies owed, they may fear that you will not keep up your end of the contract you make with them, either. In order to protect themselves, they will classify you as high or higher risk and charge you discount rates that exceed the standard ones set for card-present, low-risk businesses.

Depending on your processing needs and the variances in rates that may be assessed for your high risk business, it is prudent to shop around, consider offshore merchant solutions, and make sure that you are getting the best deal you can!