There is almost no way for an eCommerce merchant in the UK to do business without accepting credit or debit card payments. If you are also involved in an industry considered high-risk, such as advertising, travel, telemarketing, brokerage firms, the odds are you already know how hard it is to find a payment processor to serve as a mediator between you, card networks, and banks.
Many processors prefer to work with low-risk clients exclusively since they are generally a safer investment choice. This means that the selection of processors willing to work with your high-risk business can be very limited. In this post, we will tell you how to appear more reliable to high-risk merchant services UK and how to mitigate the threats associated with being a high-risk merchant account.
What Is a High-Risk Merchant?
A high-risk merchant is a business operating in an industry that carries a greater risk of chargebacks, fraudulent transactions, personal information thefts, etc. Any client that can end up costing the bank more money than it can bring is considered high-risk.
When assessing the investment status for your business, processors will take a close, detailed look at your company and the level of risk inherent in its activities. The results of such an assessment will determine the rates you have to pay and the number of merchant account options available to you. The greater the risk, the higher fees are imposed on your business.
Here are some of the things that can affect your risk status adversely and make you a less desirable client for processors:
Being a new business in an industry that experiences high chargeback and fraudulent transaction levels, or is prone to receiving fake payments with stolen credit cards.
Having bad credit ratings – if your credit score is low, your company will have to pay more to get banks and processors to trust you.
Being involved in trading in high-value international transactions – the more global you grow, the harder it is to avoid scams and frauds.
Participating in gambling, adult entertainment, or pharmaceutics sales industries – all of these are viewed as businesses with elevated levels of risk.
If banks and processors see you as a high-risk liability, they understandably feel less enthusiastic about opening and maintaining your merchant account. For such merchants, it either means backing out of the idea to accept card payments (which is simply unrealistic since around 59% of the British already think note and coin transactions will be bygone by 2030) or zeroing in on a merchant account provider that does offer services to high-risk businesses like yourself.
How to Choose the Right High-Risk Merchant Account Provider in the UK?
The good news is Britain has no shortage of merchant service providers that specialize in attending to the needs of high-risk businesses. The downside is that many of such providers make their profits by taking advantage of their clients’ desperate situation, demanding unreasonably high processing fees in return for a rather poor service.
To help you find the very best provider of high-risk merchant accounts in the UK that will meet the needs of your business in full, we have done some scrupulous research and established the key characteristics such a provider should have. No names here, just bare essentials to help you come up with the decision you will not regret.
So, when choosing a high-risk merchant account provider in the UK, make sure they meet the majority of the following criteria:
- The provider offers merchant services for a wide range of sectors and types of businesses.
- The provider is willing to customize the experience for you and can tailor the screening process to suit the needs of your business.
- The provider gives you a vast choice of payment methods and currencies.
- The provider has a high transaction carrying capacity and processing speed.
- The provider does not put a cap on the volume of card payments they let you accept.
How to Appear Less Risky to a Merchant Account Provider?
Even if your industry is considered high-risk, there are still ways to assure a provider that they can extend services more confidently to you. What scares off the majority of merchant account providers is the fear that once they start doing business with you, they will be snowed under with tons of chargebacks, complaints, and refund requests.
If you can demonstrate your ability to handle these effectively, you will end up recruiting a service provider that will give you competitive transaction costs, a rich choice of currencies and payment methods, and plenty of useful chargeback and fraud detection and prevention tools to protect your business and ensure its rapid growth.
Consider taking the following steps to appear a less high-risk merchant to the processor:
Step 1. Employ an effective fraud detection and chargeback management solution.
Step 2. Design a clear and straightforward refund policy and consider shortening your chargeback liability period.
Step 3. Work on improving your overall credit score. Don’t miss any payments, bring all your past-due accounts current, don’t submit credit applications too often.
Step 4. Avoid getting on Terminated Merchant File or Mastercard Alert to Control High-risk Merchants lists. Being on one of these automatically labels you as a high-risk business.
Step 5. Re-apply for a low-risk status after some time. The longer you stay in your business, the less risky of an investment you become.
Being a high-risk business is not a problem, but a challenge. Alongside obvious drawbacks, there are also many unique opportunities this status can bring: you can work in an industry a low-risk merchant can’t access; your account will be better protected against chargebacks and fraud; your business is likely to be more profitable than those of low-risk merchants; you are more likely to have global coverage.
All you have to do to succeed as a high-risk merchant is to find a reliable payment service provider that will put your needs first and equip you with the right tools to achieve your business goals.
Is yours a high-risk business? What high-risk merchant account provider do you trust? How do you manage to keep chargebacks at bay? Let us know what you think in the comments below!