Selecting the Right Payment Processor for High-Risk Merchants
Businesses must first open a merchant account with an acquiring bank to accept credit card payments. Merchant accounts are classified in two ways: high risk and low risk. This is normally done on the basis of the risk that they pose. And risk is assessed through various criteria including credit risk of the business, prospects and trading history of the business, and the sector in which the business operates. Some businesses do not even realize that they classify as high risk until they look for a merchant account. Go to www.hbms.com for more info.
Mainstream merchant account providers and high street banks will decline processing payments for high-risk businesses; this limits the options accessible to some high-risk merchants. Due to this, some merchants find themselves just signing up with the first payment processor that will accept them rather than looking around for trustworthy companies that specialize in high-risk merchant accounts.
Eventually, these merchants experience problems like excessively high rates, chargebacks, fund holds or even worse the payment processor puts you on TMF (Terminated Merchant File). Before you settle on the first payment processor you come across, look at these tips, they can help you select a provider suited to your business needs.
Understand your agreement. It is vital that you thoroughly read any agreements between you and the processor. Unscrupulous payment processors may use your high-risk status as an excuse to provide you with worse terms compared to what they do with other companies. Be keen on the limitations, features, restrictions or any other incidentals.
Be aware of the charges. Depending on the business sector you operate previous financial history, the products or services you deal in, fees and charges can vary. It is to your advantage that you choose a payment processor that offers most of the services with realistic rates. Watch out for excessively high setup fees, processing fees, monthly fees, and fraud scrubbing fees.
Understand your payment types. Every payment processor operates differently, and different processors deal with different card types. Before you choose a given payment processor, confirm that you business can accept the card brands they offer without any additional costs. Identifying this information early will enable you to narrow down your list of options.
So what should you do if you've been declined despite your efforts to do everything you can? First of all, remember that there are many high-risk merchant account providers who are more lenient and willing to listen. Check out http://en.wikipedia.org/wiki/Merchant_account for more info.