We’re big fans of Waze, the driving app that finds the fastest routes to get from Point A to Point B in real time. We love how Waze sends alerts for approaching potholes and obstacles, vehicles on the side of the road and even nearby law enforcement, giving drivers ample time to reduce speed.
It would be nice if the application and approval process for high risk merchant services had an app like Waze, but we like to think we resemble Waze’s mission: We help high risk merchants navigate from the application process to approval and beyond the best way we know, with the best acquiring banks we know, specific for each industry.
Getting approved for a high risk merchant account is a bit like navigating an obstacle course. There are the bare necessities for each prospective merchant: solid processing history, ample capital, currency and customer base among others. But then there are several contingencies with every industry, with particular acquiring banks, with different governments. It’s the fine print of the high risk merchant services industry.
It’s why we strongly prefer merchants speak with us directly by telephone at the very beginning of the application process. This way we can answer whatever initial questions the merchant may have and keep them on course. Based on our long history in high risk merchant processing, we share everything we know about the industry and the best acquirers.
We offer several caveats for which merchants should prepare themselves.
Among the hidden and unknown hurdles in high risk
Frequently, we’ll receive an inquiry from a high risk merchant.
‘Do you have a solution for tech support?’
It’s neither a ‘yes’ or ‘no’ question. We do have solutions for tech support and many other high risk industries – only if the merchant fits the proper criteria.
“Our solutions are not based on industry,” said Wendy Kimball, Sales Manager at Instabill. “A merchant can have everything in place, but needs recurring billing for a solution. Some of our banking partners offer recurring billing, and others don’t. If the acquiring bank doesn’t offer recurring billing, we may not be able to help them.”
Every merchant account application we receive is like a jigsaw puzzle. The pieces have to fit. They are equally important. And they are not interchangeable.
- Target market: This may be an exaggeration, but a merchant from New York intent on selling soccer t-shirts online to consumers in the Middle East region is going to have a very difficult time finding a solution. We (strongly) suggest s/he change their model, perhaps start with domestic sales.
- Monthly volume: A high volume of transactions also means higher probability for chargebacks, which makes acquiring banks squeamish. Acquirers will likely set a volume cap.
- Average transaction/Highest transaction amount: This criteria explains why the travel industry is considered high risk: trip packages worth thousands; high ticket international flights; cruise packages into four figures. Acquirers are absorbing significant blows when such high ticket items are refunded or charged back.
- Recurring billing: Not every bank will offer recurring billing for certain industries. Subscriptions and recurring billing – especially with free trials – are gateways to chargebacks.
- Processing currency: For many reasons, certain banks will work with certain currencies, not every currency.
- Processing history: Imperfect or flawed processing history is going to raise red flags for acquirers. Ditto for merchants who have been placed on the MATCH list – there are very few banks willing to take a risk on such merchants.
- Processing platform: Are you a merchant looking for e-commerce? MOTO? Check solutions? Maybe a combination of sorts? Certain industries don’t fit the MOTO model (nutraceuticals come to mind), and an acquiring bank may not allow it.
Quick story: When in doubt, ALWAYS ask your acquirer or payments processor
One of our most popular industries is CBD. Roughly 1.5 years ago, we received a phone call from one of our merchants, a doctor with a private practice, with a random question about our high risk merchant services. In the course of the conversation, the good doctor mentioned he had had great results with several patients with ailments for which he prescribed CBD oil.
He was so pleased with said results, that he mentioned he planned to sell CBD products separately out of his office. That’s where we stopped him, and explained immediately that he refrain from doing so until he (and we) spoke with his acquiring bank. The doctor had been approved for his merchant account long before this conversation, but was unaware that in order to sell CBD products, he needed a new, separate merchant account to do so.
In fact, had his acquirer or merchant account provider found that he was selling CBD products without consent, the penalties would have been devastating. For starters, he’d have lost his merchant account. Worse, he could’ve been put on the MATCH list – a penalty from which very few merchants recover.
Thankfully, the good doctor was approved for a second merchant account, and continues to process transactions with us today.
The lesson of high risk merchant services: Let us navigate
When applying for a high risk merchant account, there is a lot of navigating and unpredictability. Our fast, one page pre-application details every vital detail we need to know to get the high risk merchant services process off on a good start.
That’s when our experience comes to play: Our merchant account experts will steer your business in the best direction possible.
Do you have 10 minutes for a conversation about our high risk merchant services? We’re always up for chatting at 1-800-530-2444.