High risk merchant processing basically known as credit card processing is the handling of electronic transactions of the merchants.
Merchant processing means getting sales information from the merchant, receiving authorization for the transaction, collecting funds from the issuing bank and sending payment to the merchants.
Electronic payments are highly sensitive to fraud. Liability for misuse of card data can expose the merchant to significant financial loss.
High Risk Merchant or Low Risk?
Before you look for the payment gateway, you need to know the risk associated with the business. Be prepared before you approach the banks and gateways else you will end up with denials.
Business life and financial stability, business model, billing method, products sold /services, and processing history pays an integral part in deciding whether payment gateway will be provided or not.
Different banks and different payment gateway providers have different parameters, there are some general industries that comes under high risk.
These industries are High Risk Merchant:
| Industry | Reason |
| Adult Industry | Because of regulations |
| Financial Industry | Because of unpredictable nature |
| Airlines | High charge backs |
| Online Gaming | Instability |
| Law Firms | Survival Issue |
There are dozens of others such as:-
Auctions, cigarette, brooking, coupons, Debt collections, Horoscope, Lotteries and Memberships, Real estate, Vacation planners, VOIP services, selling of vitamin and supplements and many more industries.
Apart from this if any business model is dealing with card not present transaction that is considered as High risk merchant.
The riskiest transactions are the one that are done over the phone and Internet and if the transaction is of high amount and the business is of a kind that tends to generate complaints.
That’s why an important part of applying for merchant services is revealing what kind of business you are.
And if your business contains high risk, you will get multiple denials from the Banks and payment gateway providers.
The major difference between high risk and low risk merchant services are
For low risk businesses, the fees are usually set at a lower rate. High risk merchant accounts will not only have higher, but they will also include additional fees.
Don’t be shattered, despite the risk involved we at Merchant Stronghold will assist you in getting the payment gateway.
There is no shortage of merchant account providers. One thing that we consistently see is providers approving merchants without properly understanding or vetting the risk. No provider is perfect.
If a provider does not assess risk during underwriting and down the road a risk manager flags the merchant, they may hold your settlements, require a reserve to offset the risk or terminate account. Be cautious when selecting a partner.
What you need to do is find a provider that is willing to work with your business type and is willing to give you reasonable rates
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