Are you overpaying? How to find the Best High Risk Merchant Account today?


If you own a business that is deemed high risk, you know how expensive payment processing can be. The bigger issue is whether you are actually paying too much for your company's payment processing. Many companies continue to pay excessive or unreasonable fees, along with such lengthy contract commitments that it seems to be the only option available to them, which is not necessarily the correct approach. The good news? You can find a great high risk merchant account without sacrificing your profit margin.

1. Understand Why You Are Classified as High Risk

Businesses like companies, supplements, travel companies, gaming industries, and subscription businesses may be deemed high risk by their processing bank due to chargebacks and/or regulatory restrictions. Pricing is dependent on the risk involved with an account, which is determined by experience and the volume of business conducted on a monthly basis.

Before agreeing to a quote from an acquiring bank, check your chargeback ratio, review your return policy, and examine your processing history. If you have a clean record, this will help you negotiate better pricing with an acquiring bank.

2. Look for Hidden Costs in the Total Price

Many of the payment processors advertising low rates on their websites typically have other fees that you may not see until you receive a quote, including:

  • Setup fees
  • Monthly fees
  • Rolling reserves
  • Early termination fees
  • Chargeback fees

Always ask your payment processor for a full breakdown of all fees and for an estimation of what your fees would look like under two different pricing structures (interchange plus vs. tiered). A good payment processor will have no problem clearly laying out these fees. 

3. Compare Trusted Payment Processors

Platforms such as PayPal and Stripe provide service to some high-risk companies; however, companies may be subject to stringent conditions for approval, and to sudden account freezes if their policies are broken.

Most reputable merchant account processors provide more reliability, flexibility in pricing, and support. The difference is finding an expert in your business area, not the same old, standard solution.

4. Be Aware of Rolling Reserves

Operating a high-risk account frequently necessitates having a rolling reserve, often at 5%-10% of the credit card sales of the account. Rolling reserves aren't uncommon for many high-risk merchant accounts, but if the amounts held or the time it takes to access the reserves are excessive, you will probably be charged an exorbitant amount in fees. Try to negotiate the terms of the reservation with your merchant account processor based on your previous sales and any chargebacks.

5. Find Stability First Again Establishing a Long-Term Relationship with a Firm

The lowest-cost provider can often lead to major complications for your business due to sudden account shutdowns by the processor. This can disrupt your cash flow as well as jeopardize your customers’ confidence in your brand for future purchases. While there may be an additional yearly cost for a stable account processor, it will save your business thousands of dollars due to not losing a customer’s trust in your brand. Consideration should be given to the following attributes of a stable merchant account processor.

6. Don’t Be Shy about Negotiating 

A lot of business owners don’t realize that merchant account pricing is open to negotiation. If your business processes a consistent amount of volume, has few chargebacks, and has good business documentation, use these items as leverage in any negotiations.

Conclusions

If you feel your rates are unpredictable or too high, you're likely paying too much. Obtaining a reliable high risk merchant account is dependent upon many things, from Trinity Consultings getting approved to having transparency with pricing, appropriate reserve funds, and solid support.

Make sure to take some time to compare results, ask more in-depth questions, and look over contracts thoroughly. The decisions you make today will impact the way that you perform in terms of profitability in the future.




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