August 26, 2018
You Need a High Risk Merchant Account
Conventional merchant account providers do not generally offer credit card processing for any online business that they consider risky. Risky businesses to go into online include adult and dating websites, online pharmacies, selling downloadable software, travel businesses, e-commerce and ticket brokers. These are not risky businesses because they are not profitable; they are risky because these types of businesses have higher-than-average chargeback ratios. This makes these industries risky to credit card processors so if you have an online business in one of these industries, for example you are selling CBD products online, you will need a high risk CBD merchant processing account to accept credit and debit card payments.
Is My Business a Risk?
The short answer is that if you have any doubt, then yes, you probably will have to apply for a merchant account for High Volume Credit Card Processing. Even some well-known major retailers have to get high-risk merchant accounts because they sell expensive items, such as electronics, that people using stolen credit cards tend to buy. Each credit card processing company will have their own criteria for determining risk but if you are in a business susceptible to fraud or a former credit card processor for high chargeback rates or bad business credit has terminated you, count on having to get a high-risk merchant account.
Fees for High Risk Processing Merchant Account Services
The bad news is that you are going to pay higher fees for accepting credit cards compared to low-risk online businesses. The good news is that many companies offer high risk credit card processing services so you can find competitive rates if you comparison shop. Also, look at customer service and processing times, not just prices, when evaluating your choices. You should expect the same top-notch service as low risk businesses do not settle for less.
To be in business online, you have to accept credit and debit cards. People will not trust your business if you cannot take credit cards and you will have few, if any, sales. Well-run risky businesses have the potential to be highly profitable businesses. Remember, your competitors are also paying for high volume credit cards processing so do not be afraid to raise your prices to cover the additional costs.