Instabill has a reputation of finding high risk online merchant accounts for businesses unable to find banking privileges elsewhere. In fact, we are oftentimes the last hope for a merchant who may have poor credit; who may have been MATCH-listed; or whose business simply carries too much risk.
Merchants sometimes get frustrated and desperate for a myriad of reasons — we get it. During the merchant account approval process, we’ll receive push-back when certain negotiating points arise, particularly, these six:
1. Merchants desperate for online merchant accounts
It doesn’t happen often, but periodically we’ll receive a sudden influx of inquiries for the same industry, as many as 20-25, asking whether we can offer merchant accounts. This is a clue that somewhere, an acquiring bank has decided to cease processing transactions for a certain business type – we’ve seen it with pharmaceuticals, tech support and most recently with dietary supplements – for little reason or notice.
Acquiring banks opt to take different directions, and this causes merchants to panic and have little patience in the process of finding a replacement solution fast so as not to lose revenue. This is why we recommend check solutions as a parachute.
2. What do you mean I’m high risk?
Part of what our merchant account managers do is educate merchants who are in need of online merchant accounts. We receive many inquiries from high risk merchants who often do not understand exactly why an acquiring bank or credit card processor categorizes them or their business as high risk.
That conversation in itself can get tense. Even with pristine payment processing and credit histories, a merchant can be categorized as high risk, perhaps because of his industry type or even because he is accepting transactions online (which is part of what raises a merchant’s risk level).
3. Disagreements in pricing
We prefer to get prospective merchants on the telephone for a 10-minute conversation, enabling us to gauge whether we can even provide them with a solution. Shortly into that conversation, we’ll know which solution is best for their industry — we pride ourselves on it. However, discussing pricing terms can often get tense.
Merchants considered high risk are going to pay higher fees. It’s the nature of the business, all about the bank and payment processor protecting themselves while taking on the risk. We’ve had prospective merchants curse us and challenge us, claiming they can do better with a competing merchant processor. We’ll calmly explain that the pricing we’ve offered is the best we can do. If the irate merchant feels s/he can do better, we certainly invite them to try.
We also counsel the merchant to give our solutions between 10-12 months, to allow them to establish solid payment processing history, then approach the acquiring bank about reducing their rates based on their history.
4. Acquiring bank approvals and declines take time
When a merchant has his/her priorities and affairs in order — appropriate KYC documents, good processing and credit history, capital behind the business — approvals for online merchant accounts can be had within a week. Most other times, approvals can take longer, particularly in the following instances:
- When a merchant is slow with getting us KYC documents
- When a merchant isn’t being transparent
- When his/her industry is particularly risky, such as CBD, kratom or online pharmacy
5. There’s going to be a rolling reserve
A rolling reserve is common for high risk merchants when seeking an online merchant account. An acquiring bank imposes a rolling reserve in order to protect itself from debts the merchant may incur, such as those from chargebacks and refunds. Rather than equating a rolling reserve to swimming against the current, it should be viewed as an opportunity to build credit and credibility with an acquiring bank.
6. We don’t have a solution for you
It happens. We don’t like it any more than you.
Sometimes acquiring banks simply determine a merchant is too much of a risk to take on. It could be a lack of processing, imperfect credit history or an industry type that doesn’t fit the bank’s portfolio. With this, we suggest the merchant lower his risk profile by perhaps using check processing or perhaps a gift card payments (an offering we launched in June). Otherwise, the merchant should reconsider their industry.
The bottom line: we want to get you processing transactions
Sometimes irate merchants forget that we’re on their side:
- We want to get you approved for a high risk online merchant account.
- We want your business accepting payments.
- We benefit from your business accepting payments.
We’ve been providing high risk merchants with banking privileges since 2001. We know the online merchant account landscape inside and out and we’ve built quite the menu of domestic, international and offshore banking partners. We pride ourselves on the resources we’ve created to get high risk merchants accepting credit card payment online – and we’ll exhaust them to find merchants a solution.
Our approval process starts with a conversation at 1-800-530-2444.
