Top 3 Mistakes To Avoid When Choosing A High-Risk Merchant Account
Not all businesses are created equal, and
that applies to payment processing whether it is high risk
payment or low-risk payment processing. For businesses operating in
industries deemed "high risk" by traditional banks and processors,
standard merchant accounts simply won't cut it. This is where high-risk
merchant accounts come into existence. These specialized accounts allow
businesses to accept credit and debit card payments despite the increased risk
of chargebacks or fraud associated with their industry. Choosing the right
high-risk merchant account solution is necessary. A reliable partner can ensure
smooth transactions, competitive rates, and most importantly, the ability to
keep your business growing. However, navigating the world of high risk payment processing accounts can be tricky. To help you
avoid common pitfalls, let's now explore the top 3 mistakes businesses make
when selecting a provider.
Top
3 Mistakes: Common Pitfalls To Avoid
Now that we understand the significance of
choosing the right high risk merchant
solutions provider, let's look at some common pitfalls businesses
generally face:
Mistakes1:
Focusing Solely On Cost.
While cost is undoubtedly a factor, getting
caught up in the initial quoted rate can be a trap. There might be certain hidden fees and
unexpected charges for things like monthly statements, PCI compliance audits,
or even chargebacks that can quickly erode any perceived savings. Hence, look
for transparency and be clear to all
hidden details. Look for providers that clearly outline all fees associated
with the account. However, along with cost and hidden charges, ensure to probe
the following factors.
Customer
service: When issues arise, a responsive and knowledgeable customer
support team is invaluable. Make sure to check whether provider offers reliable
and accessible support.
Account
stability: Frequent account holds or terminations can disrupt your
business flow. Choose a provider known for account stability and clear
communication regarding potential risk management actions.
Mistake
2: Not Understanding Your Business Risk Profile.
As we earlier mentioned, Not all "high
risk" businesses are created equal. Factors like industry, average
transaction value, and chargeback history all contribute to your risk profile.
Understanding your specific risk factors is crucial. Be honest and upfront with
potential providers about your business activities and target market. A good
provider will work with you to tailor a solution that meets your needs and risk
level. Misrepresenting your business can lead to account termination, hefty fines,
and difficulty securing future processing services.
Mistake
3: Rushing Into Decision Without Proper Research.
Do not settle for the first provider you
come across. Take the time to compare different options. Research online
reviews, and industry publications, and consider contacting other businesses in
similar industries for their recommendations. When comparing providers, look
beyond just the headline rate. Consider the below mentioned factors:
Payment
processing speed: Faster processing times mean quicker access
to your funds.
Supported
payment methods: Ensure the provider offers the payment
methods your customer's preferences (e.g., credit cards, debit cards,
e-wallets).
Customer
support availability: Does the provider offer 24/7 support? How
fast can you reach a representative if you encounter an issue?
Security
features: Choose a provider that prioritizes secure
payment processing technology to protect your business and your customers'
data.
Tips
For Choosing The Right High-Risk Merchant Account
Being aware of the aforementioned top 3
mistakes is a great start, but choosing the best high-risk merchant account
involves certain considerations. Below are some additional tips to ensure you
select the perfect high risk merchant
solutions provider for your
business. These are as follows:
➔ Negotiate rates and fees: Do not be afraid to
negotiate! While some fees may be fixed, there might be wiggle room on others.
➔ Security matters: In
today's digital landscape, robust security is paramount. Choose a provider that
utilizes cutting-edge technology to safeguard your business and your customers'
financial information.
➔ Think long-term: Consider
the provider's reputation and experience in serving high-risk businesses. Look
for a partner that can support your growth and adapt to your evolving needs.
➔ Maintain a healthy reserve:
Some providers might require a rolling reserve on your account to cover
potential chargebacks. Be prepared to maintain a designated amount in reserve.
Conclusion:
Probing the world of high-risk payment
processing can be daunting, but avoiding the pitfalls discussed is key
to securing a smooth and successful payment processing experience. Rushing into a decision without proper
research leaves you with vulnerable services and limited functionalities.
Choosing the right high risk merchant account
provider offers a multitude of benefits.
You will gain access to secure and reliable payment processing, enjoy
competitive rates and transparent fees, and receive responsive customer support
when you need it most. A good provider
becomes a partner in your success, adapting to your evolving needs and
supporting your long-term growth.
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