HIGH-RISK MERCHANT ACCOUNTS
WE'VE GOT YOUR PROCESSING SOLUTION AT BENCHMARK
Your business may be labeled “high-risk.” Many high-risk companies often seek alternative processing solutions, including offshore merchant processors. The payment industry typically labels these companies as high-risk for issues including:
- Poor credit
- High number of chargebacks
- Industry known for having a high instance of chargebacks or fraud
- Industry classification – merchant category code (MCC)
- Previously being declined, or shut down, by a merchant processor
- Offshore operations – international merchants doing business in countries where they are not primarily based
- Non-compliance with card brands
- Questionable products and/or sales and marketing tactics
Benchmark Payment Networks (BPN) is a leader in merchant processing. We have extensive experience with hard-to-acquire merchant accounts and in high-risk credit card processing. We help merchants navigate the sometimes complicated matrix of accepting credit cards in the ever growing market of high-risk. Even if you have been declined for a merchant account somewhere else, we will help you get approved for a merchant account so you can begin accepting credit cards in a safe and secure manner.
Risk is calculated in terms of the potential for fraud and the resulting chargebacks from different cards, acceptance methods and business types.
IS YOUR COMPANY HIGH-RISK?
If you operate within an industry with a higher incidence of fraud or disputed transactions, and if a risk of financial failure exists, you might be considered a high-risk business. Clearly, having poor personal and business credit can automatically classify your business as “high-risk.” In general, risk is calculated in terms of the potential for fraud and the resulting chargebacks (also known as “cardholder disputes”). The riskier a transaction is or the more chargebacks there are, the higher the risk.
Naturally, card-present (CP) transactions represent the lowest risk because the cardholder physically presents the card for payment, generally yielding fewer claims of fraud as EMV chip technology effectively deals with counterfeit fraud.
With card-not-present (CNP) transactions via telephone, mail-order or online sales, it becomes more difficult to verify that the purchaser is the legitimate cardholder, so naturally the risk factor goes up.
Transaction disputes resulting from fraud (real or friendly) can be harmful to any business, as chargebacks can disrupt your business cash flow when funds that were previously deposited into your bank account are suddenly withdrawn. What’s more, chargebacks can come with a penalty fee that can range from nominal to exorbitant, and too many chargebacks can cause your merchant account to be closed.
At Benchmark, we closely work with you to assess your needs and create the optimal merchant processing solution for your industry type, complete with fraud and chargeback mitigation services. By addressing all sides of the issue – processing, fraud and chargeback prevention, and chargeback reversal – we improve your business’s longevity.
Operating within a high-risk industry requires more thought since the majority of merchant banks won’t normally accommodate these industries.
We understand the challenges of companies offering continuity programs, trial and free offer subscriptions, and straight sales in the e-commerce and MOTO space. With strict terms and conditions for late cancellations, buyer’s remorse, and the higher than average number of chargebacks from subscribers and customers, many companies find it difficult to open a merchant account that meets their needs. Despite this, the fact remains that having the ability to process credit card transactions on a recurring basis is absolutely vital to these businesses. This is why Benchmark evaluates each business on a case-by-case basis to create a credit card processing solution that provides you and your customers with the best payment options.
FREQUENTLY ASKED QUESTIONS
It is absolutely essential to understand how chargebacks affect your bottom line, as chargebacks can be the reason funds are held and merchant accounts are terminated.
Chargeback activity can be a reason why your business is labeled high-risk, including:
- A higher than average number of chargebacks
- An increase in the number of chargebacks
- A disproportionate number of chargebacks
- Operating in an industry that is commonly associated with high returns or chargebacks
- Placed on the MATCH list
Yet, there are businesses that have never had a single chargeback and are classified as high-risk.
Typically, the following products and services are viewed by the processing industry as high-risk. By no means does the list below represent all industries considered high-risk. Conversely, not all of the industries on this list will be considered high-risk all of the time.
- Casinos, gambling, or gaming
- Pharmaceuticals or drug store sites
- Nutraceuticals and supplements
- Dating services
- Direct marketing
- Recurring billing sites
- Adult content
- E cigarettes, or E liquids
- VOIP or telemarketing call centers
- Travel and tour services
- Credit repair, consolidation, or counseling
- Debit collections/debt recovery
- Subscription/membership-based sites
- Magazine subscriptions
- Extended warranty
- Cash advances, payday loans, or loan modifications
- Ticket sales
- Software or other downloads with potential copyright issues
- Psychic or hypnosis services
We can provide high-risk payment processing – often within days – through our relationships with our trusted network of banks. Enjoy some of the advantages of our high-risk processing services, such as:
- Increased sales volume allowances
- Multi-currency options
- U.S.-based customer support anytime
Let us help you connect to all that is possible in high-risk, merchant account solutions. We can implement the best functionality for your business so that you can thrive in this fast-moving world of commerce.