When you handle high-value transactions frequently, the profits can be lucrative. However, for vendors in businesses like catering and wedding planning, these payments have a significant downside in the form of processing limits set forth by your merchant account provider. Just how do you avoid the sting?
Understand your current limits
Financial institutions and payment processors set limits to guard against fraud and other risks. In other words, they are an inevitable part of doing business. However, you can take steps to minimize their effect.
First, review your current agreement with your high-volume merchant account provider. Focus on your daily, weekly, monthly, and single transaction limits. Then figure out why these limits have been imposed. Many companies deemed as high-risk start with lower limits. This may also occur if your business is new or if you have a spotty credit history.
If you find that you are consistently nearing or reaching your limits, it may make sense to contact your processing company to ask for an increase. In order for it to be granted, however, you should be able to demonstrate a history of transactions with low chargeback and fraud rates.
Offer diverse payment methods
Relying on only one or two payment methods for in-person or card-not-present transactions can be risky and frustrating to customers. In contrast, offering options like ACH, wire transfers, and multiple merchant accounts can help you avoid transaction limits. These choices also make buyers feel more comfortable when spending large amounts of money.
Automated clearing house (ACH) transfers are reliable and cost-effective, especially for large payments. Customers simply provide you with their account and routing numbers and give you permission to have a specific amount withdrawn. After their bank authenticates the payment, it is transferred directly to your bank. Both transaction fees and limits are significantly lower with this method.
Wire transfers are another viable option for large or time-sensitive payments. Final and irrevocable, these transfers usually occur within hours. However, they do carry higher fees than their ACH counterparts. In many cases, these costs are still lower than traditional card swipe costs.
If you have significant and ongoing high-volume transactions, another option is to partner with multiple merchant account providers. When you do so, you can disperse your sales across several entities, enabling you to avoid single-account processing limits.
Implement best business practices
As stated above, there are certain industries that are automatically flagged as high-risk. However, even if you operate in the travel or ecommerce sectors as part of your catering or wedding planning operations, there are steps you can take to lower your perceived risk.
Start by maintaining a positive transaction history. Avoid fraud whenever possible by installing robust security measures and training staff in how to use them. Keep chargebacks low with transparent returns and exchange policies, as well as prompt and knowledgeable customer service. When your history is positive, your business demonstrates stability and reliability, two qualities that are particularly important to risk-averse payment processing providers.
The bills that you send are also important. When they are clear, your customers are more likely to understand the charges. As a result, dispute numbers will be lowered.
Finally, work hard to establish and maintain a strong business credit profile. When your credit score is robust and your balance is consistently high, your merchant provider will perceive you as an attractive client worthy of their trust. In time, you will see that your credit limits may start to rise.
Don’t let processing limits hamper your catering or wedding planning business. Act proactively to strengthen your own knowledge and business practices, and open a dialogue with your merchant account provider. Before you know it, you will be able to accept larger fund transfers without a hitch.
