High Risk Merchant Highriskpay.com status may not be catastrophic, but it can make life challenging in certain industries. Being turned away by payment processors can be an immense source of anxiety for merchants – something many merchants fear happening all too frequently.
Expect a lengthy application process and to provide more information about your business such as bank statements. Furthermore, you may be required to fund a rolling or capped reserve fund.
Chargebacks
Chargebacks can be an extremely frustrating problem for businesses, particularly if they operate within certain industries (like interior decorating or furniture sales ) or have less-than-stellar credit histories. While sometimes customers initiate chargebacks due to uncontrollable factors ( like losing their card or waiting too long for delivery ), in other instances these claims may be legitimately made against your company.
Companies identified by payment processors as high risk must often endure longer application processes and pay higher monthly fees in order to manage their increased level of risk. To help avoid chargebacks, businesses should confirm the cardholder’s identity prior to shipping goods; document all returns/shipping policies clearly; and take proactive measures against fraudulent claims.
But, if a business experiences too many chargebacks, they will quickly fall into the high risk category and may struggle to secure merchant accounts in the future. To address this hurdle, working with a merchant service provider that specializes in high-risk merchant accounts is an ideal solution.
Fraud
Merchants labeled as high risk can find it challenging to secure traditional payment processors. Each processor and bank sets their own standards when classifying businesses; factors that might contribute could include transaction volume, chargeback rates, operating in highly regulated industries or depending heavily on international sales are just some of them.
High risk merchants need a provider who understands their industry, offering solutions that help mitigate fraud and increase revenue. This might involve verifying customers’ identities, offering clear billing descriptions and setting shipping and return policies clearly.
Businesses must also remain transparent during the application process and keep all financial documents ready for inspection. Furthermore, businesses can attempt to reduce chargebacks by maintaining healthy cash levels, decreasing chargeback ratios and being proactive when faced with chargebacks.
Reputation Damage
Payments industry merchants may be classified as high risk due to various reasons, from past chargebacks or fraud cases, transaction sizes or internal criteria of payment processors determining this status; ultimately it comes down to whether certain industries fall under their purview and which solution providers seek more information from businesses regarding risk.
Businesses often face difficulty when searching for merchant accounts that meet their needs, which can result in significant sales loss and customer growth stagnation, as well as irreparable damage to both merchant and payment service provider reputations. Such problems have long-lasting ramifications on liquidity, stock price and profitability of companies alike – especially those offering buy online, pick up in store (BOPIS) options which may lead to return fraud.
Compliance
Credit card processing providers generally regard High Risk Merchants as businesses at greater risk of chargebacks, leading them to implement stricter application processes and higher payment processing fees as well as reserve requirements such as volume caps or fixed percentage requirements for credit card transactions. International transactions present greater challenges when it comes to fighting disputes as security measures vary greatly between nations preventing fraud prevention measures from working effectively.
Businesses often classified as High Risk include travel, life coaching, credit repair, ecommerce, nutraceuticals and document preparation businesses; although unexpected industries like debt consolidation can also fall under this category. If your business falls into this category it could end up on Mastercard’s MATCH List (Member Alert to Control High-risk Merchants), an international blacklist which could end up impacting its ability to accept payments – this would be disastrous!