The reasons why your business may be considered high risk can range from having a poor credit rating to the specific type of business you are operating and sometimes this classification is completely out of your hands.
While there are some ways to reduce your risk profile, including opening up multiple merchant accounts, there are other factors that may put you in the high-risk category, including:
- A start-up business with little or no credit card processing history can be considered high risk by banks because of their lack of payment history.
- A poor credit rating or a history of bankruptcy can make it difficult to secure a merchant account because banks are hesitant to take on the risk.
- An industry with a high chargeback ratio such as travel is considered high risk due to the risk of customers requesting refunds for such transactions.
- High average ticket amounts such as airline tickets are risky due to their high cost and risk of chargebacks.
- Subscription-based products of services including online dating and magazines. While a good source of revenue, these are also at risk for cancellations making them a high risk for payment processors and banks.
- A history of merchant accounts terminated by a bank is considered high risk for banks or payment processors take on.
- A business that processes high volume transactions can be risky, especially without a history of good business practices to ease the mind of banks and payment processors.
A high-risk classification can make it difficult to secure a merchant account from a reputable company. With a limited number of providers willing to take on a high-risk business, you might be left signing up with a provider charging high rates for substandard service.
Thankfully, there is an alternative. Here at JJS Global, we believe that if your business is legal and legitimate, you deserve a fair chance to accept credit cards online, even if you are working within the card-not-present environment.
We provide high-risk merchant accounts with a variety of features that make it possible for your business to process credit card payments from your customers.