High risk merchant processing

[Alisha]

What is high risk merchant processing merchant account? How risk will be reduced in a merchant account?

[Freelancier]

The "high risk" means the underwriters are going to charge a higher interest rate, because the account will have a higher risk of chargebacks and disputes.

Example: porn sites.

[Alisha]

Thank you....@Freelancier,
In that case, how one can reduce the minimum risk during payment?

[Freelancier]

"Card present" transactions have lower risk.
Find an underwriter/processor who does not perceive the business model as a large risk.
Change your business model to one that is more acceptable to the underwriters.
Cut a deal to agree to the higher risk model for a year to prove you're not a higher risk with the expectation that they will take that history back to the underwriters to re-evaluate their risk perception.

[Alisha]

@ Freelancier,

Thank you so much for this important message.
Have to anything to say regarding this above topic that will more helpful for me in future?

Again thanks in advance.....:D

[RiskyBusiness]

@ Freelancier,

Thank you so much for this important message.
Have to anything to say regarding this above topic that will more helpful for me in future?

Again thanks in advance.....:D

Hi All,
came across this thread and thought I'd jump in. I've been in merchant services for many years and understand, all too well, the convolusion that makes up my industry. "High Risk" businesses were always difficult to get done because of the banking partnerships I had were too stringent. I worked tirelessly for many years to find good, U.S. based, banks that will provide merchant services for businesses that fall under the category of high risk. The company I work for has partnered with a banking group that has multiple banking relationships that approve high risk businesses left and right. If anyone is getting the run around with other merchant service providers, please feel free to contact me. I don't make statements like "we'll get anyone approved!" but I have seen approvals on companies that I thought would never have had a shot. These banks are great, and they don't gouge you on fee's.
Best Regards

[ChrisLubin]

"Card present" transactions have lower risk.
Find an underwriter/processor who does not perceive the business model as a large risk.
Change your business model to one that is more acceptable to the underwriters.
Cut a deal to agree to the higher risk model for a year to prove you're not a higher risk with the expectation that they will take that history back to the underwriters to re-evaluate their risk perception.


I've run online sites for over 10 years in the high risk space. It's important that you build a strong relationship with your contact that helped you open your merchant account. Because if you do run into trouble and its urgent, you want someone that is able to rectify the situation immediately, whether its switch processors / get a new merchant account open etc. Bottom line is you always want to be up and processing and thats a challenge in the high risk space. My friend Greg is the one that got me started and kept me a float.

[RiskyBusiness]

I couldn't agree more with you on this point. It is definitely important to have a strong relationship with your processor in case a "life save" ever needs to be thrown your way. On that some topic, you have to have the right processor for your business in order to have that strong relationship and help when needed. Definitely a good point you have there Chris.

[davispbs]

What is high risk merchant processing merchant account? How risk will be reduced in a merchant account?

According to Visa Global Acquirer Risk Standards (GARS), A High-brand risk merchant is defined as a Merchant Outlet that is required to be classified with Merchant Category Code 5967, “Direct Marketing—Inbound Teleservices Merchant,” 5966, “Direct Marketing – Outbound Telemarketing Merchant”, 5962, “Direct Marketing – Travel-Related rrangement Services”, 7995, “Betting, including Lottery Tickets, Casino Gaming Chips, Off-Track Betting, and Wagers at Race Tracks”, 5122, “Drugs, Drug Proprietaries, and Druggist Sundries” and 5912 “Drug Stores and Pharmacies

You may wish to go through the GARS, or send us(PaymentBillsService) an email to know more about this stuff...

[smallbizfinancier]

Depends on whether or not the card is present and what type of purchase we're speaking of. For example: marijuana dispensaries are considered high risk, so you the merchant will pay higher rates per swipe.