All You Must Know About High Risk Credit Card Processing | Pros and Cons

There are many facts you need to know about high risk creditcard processing. Getting a high risk merchant account from a bank which offers high risk merchant services is your first step. It is the first move towards accepting credit card payments online. Low risk and high risk are the two types of merchant accounts. A high risk payment processor becomes necessary once you or the business you are processing an account for is thought to be risky. Many merchant account service providers still prefer high risk credit card processing despite the risk. This is because it has many advantages despite also having some disadvantages.

Pros of High Risk Credit Card Processing

Even though most people consider the high risk to be a negative, it still offers some or all of the following positive value;

*Chargeback not intimidating: In comparison to high risk credit card processing, normal merchant accounts get appraised to have lesser chargeback. But the long term consequences of low risk chargeback could make this a great disadvantage. Extreme chargeback hardly makes you close a high risk merchant account. Although your fines might be greater, no danger is posed to your assured long term business operations.

      *Universal extension: Due to the probability of expansion which high risk payment processors offer, most merchants who are looking to extend into universal ecommerce would demand for their services. These processors can sell to clients from all countries around the world, accept different types of currencies and process transactions even when credit cards are absent. 
      *Unlimited earning probability: High risk credit card processing can offer limitless earnings. This is because it can be used to accept card transactions that are beyond a given amount, earn higher than anticipated monthly revenue and offer repeated payments.

Cons of High Risk Credit Card Processing

For those who take the high risk as a negative, the following are some or all of the negative values they present;

*High chargeback charges: The rate of chargeback fees for high risk credit card processing is always higher. For every specific case the merchant has to answer, every high risk payment processor charges greater fees.

*Extreme Charges: As all processors believe that chargeback cannot be avoided, they always impose fees that are extreme and excessive. These extreme and disproportionate charges are very likely to drive the merchant out of business completely.

*Contingency funds against theft and fraud: High risk payment processors always stipulate that you have a reserves account. This is normally a savings account which does not pay any interests. It is used by the obtaining bank for emergency circumstances. This is so the bank can ensure that assets are protected against possible theft or fraud. This can bring challenges to high risk merchants as they must always keep a rolling reserve with the bank. They have no access to the reserve for up to around 180 days most times.

These are the positive and negative values you are likely to encounter. They are among the high risk credit card processing features that could make your business a high risk.

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