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No More Challenge To Get A High-risk Merchant Account

Are You Doing A Risk Associated Business? Keep Your Business Up With High-risk Merchant Account

Many times business owners are unaware that they are doing a high-risk business. The challenges come to them when they approach a financial institution for a loan or if they apply for merchant services through an acquiring bank or payment processor. They even don’t know why their application is continuously rejected by all the processors. They keep on approaching different processors and processors keep on holding the merchant. This article is especially for merchants to aware them about the high-risk industries and what are the factors that help them to estimate their risk. Before evaluating the risk factors, first discuss what is a high-risk merchant account. It may help a merchant to self-evaluate whether he needs it or not.

High-risk Merchant Account

What Is a High-Risk Merchant Account?

A high-risk merchant account is a merchant service that is provided to a merchant by the processor. The named high-risk is because the merchant account is for those businesses which are considered as a high-risk business by the acquiring banks. Sometimes, a merchant needs to pay a little higher fees to avail a High-Risk Merchant Account. Not only the higher transaction fees but also a rolling reserve that compensates for the overall risk. Many times the merchants are willing to pay higher fees as well as rolling reserve, but then also they face challenges because most of the processor doesn’t want to onboard a risk-associated industry.

Why are Processors flagged as High-risk?

Many times when a merchant gets to know that their businesses are involved in high risk, they thought that, are they doing illegal activities? But this is not the reason, many times a full proof legal businesses doing legal activities are labelled as high-risk. The biggest reason that the processor estimates your business in the risk category is your average monthly sales volume. Higher the sales volume, higher the chances that your business is prone to chargebacks. Apart from monthly sales volume and chargeback, there are more factors like high ticket transactions, card-not-present transaction, cross border transaction, or poor credit history.
The factors are not limited to but are the most common which most of the processors used to estimate your business risk.

Industries Which Are Flagged As High Risk

There are lots of industries which are flagged as a high risk just because of the factors we have discussed above. Now let’s discuss some of the industries which come under the risk factors.

  • Adult entertainment
  • Credit Repair
  • Online magazine sales
  • Online Dating
  • Online Gaming
  • Video streaming
  • File hosting
  • Advertising services
  • Affiliate marketing
  • Cannabis
  • CBD Oil
  • Pawnshops
  • Astrology or Tarot Card Readers.

There are many more industries which are considered as a high-risk industry by the acquiring banks. Anyways, if you are a merchant looking for a high-risk merchant account, contact Quadrapay.

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