If you are running a high-risk business, having a high risk payment gateway is more than essential. If you are aware that you are running one and want to know how to set up a high-risk merchant account, we got you covered.
Setting up your payment gateway involves no more than 6 steps. Before we get into knowing them, let us understand how a high-risk merchant account works.
Table of Contents
Why do you need a high-risk merchant account?
When running a high-risk business, you are likely to witness frequent chargebacks and returns. There can be multiple situations where you might need credit card transactions to make payments secure.
But, how do you know whether your business is a high-risk one? Businesses that have the potential to cause financial failures need high-risk merchant accounts. Also, businesses that come under high-risk industries where frequent transactions happen need high-risk merchant accounts.
For instance, if you sell firearms or guns, your business needs a high-risk gateway. Businesses that are illegal in certain regions need high-risk merchant accounts. Companies selling e-cigarettes or related products need high-risk gateways to make their transactions safe and secure.
Some other businesses that should have a high-risk merchant account include e-commerce, financial services, tobacco processors, and gambling websites.
If your business falls under any of these categories, your business is a high-risk one. There are ups and downsides to being a high-risk business holder. While you might not get a payment processor effortlessly, you can still find one.
Things you should know
If you have decided to get a high-risk merchant account for your business, there are a few things that you can do from your end.
🡺 Be honest with the service provider.
Provide details about your business and products to the high-risk account provider. If you are not honest with the provider at the start, the later consequences can be hefty to handle.
For businesses that do not hold a substantial capital investment, providing the processor with the history of transactions is necessary.
🡺 Keep track of your progress.
Your work doesn’t end with providing the details to the provider. You have to keep track of your progress by checking on transactions regularly.
🡺 Prioritize security before everything
Sometimes, the payment providers may not be flexible. In situations like these, you should carefully look after the safety of your customers and their transactions. Look for encrypted server transactions to have a safe experience.
How to set up your high-risk payment account and gateway?
Now that you know if your business is a high-risk one, how do you set up a high-risk gateway? There are a few steps that you could follow to get your merchant account.
Increase your eligibility
Getting a high-risk merchant account might not be simple. But, you can improve your chances by increasing your eligibility. The thing that you need to focus on is to get a positive rating. If you have a history of bankruptcies or other issues, make sure you clear all of them before applying for a merchant account.
Provide all the details to the processor
As we already saw, providing the processor with all the necessary details is more than essential. Give information about your previous credits, bankruptcies, and transactions. Do not try to outsmart the processor, as it can cost you hefty amounts later.
Also, you need to be aware that high-risk merchant accounts can be expensive. Be ready to pay high amounts, especially if you have a poor credit history. It is essential to generate income and improve impulse purchases.
Look for the best service provider
The meaning of “best” can change with your credit history and your requirements from a merchant account. Ask questions to processors before you make a move. Look for the fee details and related documentation processes. Generally, there are a few regular fees that you need to pay.
- Transaction fee: It is the amount of money that you need to pay for every transaction. It can vary from one processor to the other.
- Monthly minimum rate: The minimum amount of money that you have to pay every month. It can depend on several factors like the processor’s reputation and your credit history.
- Chargeback fee: It is the amount you pay to the processor to manage disputes and issues.
Prepare all the necessary documents
There are certificates and documents that you need to apply for a merchant account. All of these documents will help the processor understand your business and your requirements from a merchant account.
Make sure that you have the following:
- Certificate of incorporation.
- Details of the shareholders.
- A copy of your license and utility bill.
- Credentials of your customers.
Apply for a high-risk merchant account.
There are provisions for you to do this online nowadays. Many service providers have verified websites through which you can apply for a payment gateway. Whether your profile gets approved for a high-risk gateway solely depends on your history of transactions.
The processors will take some time to analyze your profile and suggest the next few steps. Once your profile gets selected, the process gets a lot less complicated.
Keep track of the process
Most processors take care of the setting up procedure themselves. But as a business holder, you should check for necessary updates frequently.
Ask the processor if any changes can better your profile. It will improve the chances for you to find a bank that will best suit your needs.
Once your processor finds a bank that can help you, make sure that you clear all the doubts about further procedures.
Advantages of having a high-risk merchant account.
Benefits of having a high-risk merchant account:
- Global service
- Protected transactions
- Improvement in profit rates
Despite these, you might have to pay higher amounts and undergo a long process to get a high-risk payment account and gateway.
Gaining the trust of your customers is critical when you run a high-risk business. Make sure that you provide a safe and secure environment for your buyers and consumers.