Credit card processing is the lifeblood of many businesses. What does a company do when banks deem it too high of a risk to work with, though? They might turn to a high-risk credit card account processor.
It is great that there are processors out there willing to take on such an account. However, what should you know about high-risk credit card account processing before committing to it?
The same services are available to high-risk accounts as are available to regular users of merchant terminals. You'll be able to perform on-site scans of credit cards using cash registers. As long as your website complies with payment card industry standards, you will also be able to accept credit cards over the internet.
On the customer side of things, folks purchasing products and services will not see anything. The high-risk designation is an issue purely between you and the processing company.
The dominant difference is the fees for using a high-risk credit card account processor. Generally, these fees are higher than normal merchant terminal users encounter. Also, there is a good chance you won't be able to obtain a standard rate. The processor will review your profile and determine what rate appropriately compensates them for their risk.
Companies Classified as Risky
Processors and banks usually deem companies to be risky under two circumstances. First, the business may have a lot of chargebacks from customers. Second, the business might issue a large number of refunds. Both of these activities hurt the processors' profit margins. Consequently, a processor might shut down a normal account and tell you to move to one more suited to your business profile.
Is the Extra Fuss Worth It?
If you want to be able to offer everyday credit card processing services to your customers, you're going to have three options. First, you can start shopping for a services provider that will take you on with a normal merchant terminal account. Second, you can turn to a high-risk credit card account processor, such as Superior High Risk Credit Card Processing. Finally, you might be able to use a third-party processor, but these companies often only handle payments from websites and nothing from in-person sales.
Typically, any business that can do merchant terminal processing within the standard system their bank offers does so. Most folks looking at high-risk credit accounting processing services need them to continue to offer standard credit card sales to their customers.