Accepting credit cards is almost a necessity for businesses today. However, some companies can find it difficult to get a merchant account for high risk credit card processing. Banks and financial institutions may hesitate to approve an application from a company they consider a high risk.
What Is a High Risk Credit Card Processing Account?
A business is deemed to be high risk if they fall into one of two categories:Nocturnal Animals 2016 movie
- Lack a history of financial stability
- Are part of a high risk industry
If either or both of these scenarios are true for your business, you may find your company labeled as high risk. It’s important to understand each of these factors when applying for a merchant account.
Lack of Financial Stability
A new business with no history at all may be considered a higher risk. In addition, a company with previous financial troubles or where the owner has personal credit problems may also fall under this category. Another concern for payment companies is that your current revenue doesn’t support the amount of credit you’re applying for.
If any of these situations exist, you may find it difficult to get approved for a merchant account. The good news is that you can work to improve this situation over time. Meanwhile, you can look for high risk credit card processing solutions to help you get the credit you need to process payments and help your business grow.
The High Risk Credit Card Processing Industry
If your business is in a high risk industry, you may find it more difficult to get approved for credit card processing accounts. You may not realize all of the businesses that fall into this category. Companies taking automated recurring payments are considered riskier. In addition, businesses in these categories also receive this label:
- Travel services
- Online auctions
- Bail bonds
- Adult products
- Online dating sites
- Debt services
Many other industries are considered a higher level of risk. For instance, a company selling expensive or custom items, or one selling products for the future, such as concert or sporting tickets may find it difficult to get a merchant account.
Companies in an industry with high chargebacks, such as collections agencies also receive this label. As you can see, numerous companies even in good standing can be considered a higher risk just because of the nature of their business.
All of these companies would be at a disadvantage if they didn’t accept credit cards. In fact, some of them wouldn’t exist without this payment option. For this reason, high risk merchant accounts exist to give businesses the ability to take credit card payments regardless of their industry or financial history.
To learn more about high risk credit card processing, merchant accounts or how to make MIDsource your payment provider, contact us.