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Who Needs High-Risk Merchant Processing Anyway?
Do you have a business that’s considered high-risk? Has your company been rejected for processing services based on your industry? If so, you may be wondering if there’s any way to process payments without all the extra fees and red tape. The good news is that many merchant account providers specialize in high-risk transactions. This blog will describe what makes an industry high-risk and which industries are on the high-risk merchant list. By the end of this blog, you will learn why high-risk merchant processing solutions are necessary for these businesses.
What Makes a Business High-Risk?
There are a number of qualities that can make a business high-risk in the eyes of banks and other financial institutions. One is known as “card not present” transactions, which typically occur in eCommerce settings. This type of transaction carries a higher risk of fraud, as the cardholder is not present to verify the purchase. In addition, businesses with high chargeback rates or high ticket prices may also be considered high-risk. Reputational risks can also come into play, as companies associated with specific controversial industries may have difficulty securing funding. In general, high-risk businesses may have more difficulty securing traditional forms of financing—but several specialized lenders cater to this market.
High-Risk Merchant List: What’s on it?
The high-risk merchant list is a compilation of businesses that are considered to be high-risk by financial institutions. There are many different types of high-risk merchants—all of which fall have one or more of the qualifications mentioned above.
Some industries with a tendency for higher chargeback rates include traveling agencies, telemarketing, tobacco products, and timeshares.
Many other industries are on the high-risk merchant list, all of which typically require high-risk merchant accounts.
High-Risk Merchant Processing
Now that we have a deeper understanding of the qualities of a high-risk company and which industries fall into this category– let’s look at what high-risk merchant processing can do for your business. Choosing a high-risk merchant account and its processing services should be determined by the credibility of the payment processor. Seamless Chex offers unique expertise in the high-risk merchant processing space, offering: