If you want to accept credit cards online for your retail business, you cannot make a single sale until you establish a relationship with a payment processing company. This third-party vendor is the entity that will allow you to conduct secure shopping cart transactions via software that they will provide for your use. Although many companies find it easy to collaborate with their payment processing company of choice, your options might be limited in certain circumstances. As a result, you may need to work exclusively with a high-risk merchant account provider.

What is a high-risk merchant account provider?

Just as is the case with your business, payment processing companies exist to make a profit. They therefore want to work with companies that pose minimal risk and are highly likely to pay in full with few to no added complications. Although many entrepreneurs work in sectors that pose little concern for these lenders, there are numerous instances when your business type or the way you sell your products makes a merchant account provider wary.

When is a business considered high-risk?

There are several scenarios when sellers represent added risk for lenders. For instance, their business might tend to be hit with a higher than average number of forced refunds, also known as chargebacks. These occur when a customer disputes a charge and requests a refund from their credit card company without first consulting the merchant. Responding to chargebacks can be time-consuming, and too many can even result in financial penalties or account closure. They also require additional attention from the payment processing company.

Additionally, businesses might pose extra risk if they operate in certain sectors. These include adult entertainment, travel, dating, gaming, CBD sales, firearms, and more. Many of these sectors also tend to incur chargebacks and are highly regulated, again requiring a higher degree of scrutiny and time investment for merchant account providers.

Retailers might also be classified in the high-risk category as a result of their own past behavior. Poor credit scores or a prior history of financial problems or chargebacks can make lenders nervous and force you into this designation.

Next steps for high-risk businesses.

Have you been told by lenders that you will not be accepted for a standard merchant account due to the industry in which you operate or for some other reason? While this might seem alarming, the good news is that you have plenty of reliable high-risk merchant account options at your disposal.

That being said, not all of them are created equal. Although you have been placed into this category, remember that you are still entitled to partner with a reliable, affordable vendor who can help you to provide secure payments and excellent service to your customers throughout their shopping journey. As you peruse the many vendors competing for your business, there are several qualities that you should demand in your high-risk provider.

1. First, the company should give you a comprehensive listing of all payments you will be required to submit. While some fees are non-negotiable, many are. Do thorough research to learn what similar companies charge, and don’t sign any document until all of your questions have been answered to your satisfaction.
2. Next, partner only with a vendor who offers you flexible payment choices. As your business grows, your customers may ask to pay using a variety of options including but not limited to credit and debit cards, digital wallets, or bank transfer/e-checks. If you sell internationally, you will also want to have the capability of multi-currency transactions.
3. Reliable, prompt customer service is another requirement that you should not do without. When you run an ecommerce retail business, every second that you are offline means the potential for lost profits. Therefore, you need a vendor who is available during expanded hours and via various channels such as chat, email, phone, internet knowledge base, and user forums.
4. Finally, only work with a vendor that is willing to evolve with your business. Although you can expect to pay higher per-transaction and other fees in the initial stages of your relationship, a long-term positive financial record should give you the opportunity to reduce or eliminate some of these charges. In addition, the company should continually be updating its systems and hardware offerings to remain in line with the current security landscape.

Maintaining a profitable ecommerce retail business requires superior products, excellent customer service, and a solid underlying business and payments infrastructure. Taking the time to partner with a top-shelf high-risk merchant account provider is one of the strong building blocks that will give your retail operation the support and security it needs to thrive now and for years to come.