HIGH RISK ACQUIRING 

Are you an e-commerce entrepreneur? Are you conversant with the idea of a high–risk merchant account? Whether you are a newbie or a professional in the arena, you have landed on the palms of a caring partner. We at Areto Systems care about clients like you, and we’ll take you through what it takes to acquire a high-risk merchant’s account. First things first. 

What is a merchant account?  

A merchant’s account is an account that is approved by a financial institution to enable businesses to process credit or debit card payments. For any e-commerce entrepreneur, this is a must because we are in an era where consumers are going “paperless.” A merchant’s account can be classified as low risk or high risk depending on the nature of the risk associated with it. When you apply for the merchant’s account, the card processor is under no obligation to accept you as their customer.  

Many entrepreneurs are engulfed in a panic mode when their application is rejected in the name of “High risk” business. But does it mean being labeled high risk is dreadful? In some cases it is, but for certain merchants in specific verticals, the cost associated with being a high-risk entrepreneur might be a blessing in disguise. However, because of the sensitivity of the matter, it takes more than your effort to succeed. And that is where Aretosytems.com come in! 

Why are you considered high risk? 

A number of factors are taken into account before a business is classified as high risk. Some of these reasons include: 

• The inability of your personal financial institution to support the volume of sales you are applying for.  
• Your product or service features a long chargeback liability period. For instance, if you intend to offer annual membership, your potential customers will have a longer period, usually, 18 months to launch a chargeback. The period is six months long from the end of the stipulated service date.  
• Your business operates in an industry associated with high chargebacks. The financial institution feels too many resources will be spent to manage your account and they might not accept your application regardless of the anticipated chargeback limits.  
• “Reputational” risk associated with your account like those in the adult industry.  
• If you feature in the Member Alert to Control High-Risk Merchant (MATCH) or Terminated Merchant File (TMF) list. Your credit card processing can be canceled and placed on this list if you have received too many chargebacks. 

If your business has been labeled as High risk, there is no cause for alarm. With our help, you can still get the credit card processing services and operate normally with ease. It can be daunting because you will be required to submit a lot of information regarding your business finances and background. This and other hurdles can be challenging especially if you are new, but with Aretosystem.com at the helm, you need not worry. We have invaluable experience and a plethora of options to help you find a provider who will work with your regardless of your risk profile.  

Some of the businesses that face major hurdles when applying for merchants account include; 

• E-commerce companies selling goods through Amazon, eBay, and other platforms. 
• Consolidation, repair, and debit collection firms 
• Nutraceuticals, alternative medicine, and supplement sellers.  
• Consumer electronics businesses 
• Financial advisors and consultants 
• Gaming and gambling enterprises 

• Insurance providers or sellers 
• Publication, advertisement, and investment strategy companies 
• Offshore holdings 
• Used vehicle sellers 
• Web service and SEO service companies 
• Marketing and talent firms.  

What are the benefits of a high–risk merchant account? 

If you wade through the challenges of being labeled as high risk, you stare at the wide open door of unending opportunities. High-risk card processing has its upsides that make it easy for entrepreneurs to pursue the avenue. Some of the benefits include; 

• Global expansion 

If you are an e-commerce merchant the fear of the unknown when operating a high-risk account can be terrifying. However, it’s comforting to note that the benefits of operation such an account outweighs the underlying cons. The prospect of operation a low-risk merchant account is appealing at first sight, but the limitations that come with it can easily impede online growth. Operating a high-risk merchant account allows you to; 

1. Transact in multiple currencies 

1. Deal predominantly in card-not-present transactions. 

1. Sell internationally, to clients outside USA, Canada, Australia, Western and Northern Europe, or Japan. 

It’s vivid that a high-risk account boosts e-commerce sales thereby increase the earning potential. The idea of selling to limitless places and operating in multiple currencies increase your revenue opportunity and cancel out the associated risks.  

• Increased profits 

The credit card networks have a wide array of products and services that are considered dicey, hence not fit for a low-risk merchant account. Any business that features the Merchants Category Codes (MCCs) can only be supported by a high-risk merchant’s account. The constraints of MCCs present major hurdles to entrepreneurs looking to venture into the high revenue earning niches. However, with the high-risk merchant account, you get the freedom to sell virtually anything imaginable.  

• Unlimited earning potential

A high-risk account eliminates the limit of the revenue you can generate through credit cards. It facilitates a thriving subscription business model which can be a major drive for long-term growth. Many merchants depend on the stream of income created by this recurring payments and installments billing. Additionally, merchants seeking the enticing profits from the big-ticket transactions should consider a high-risk account worth taking.  

• No chargeback threat 

A low-risk merchant account creates a tenuous relationship between the merchant and the card processor because of the chargeback limits. The chargeback to transaction ration is usually under rigorous scrutiny. When the chargeback threshold is crossed your acquirer can abruptly terminate the account, forcing you to pursue a high-risk account.  

A high-risk account is very rarely terminated for reasons related to chargeback thresholds. It secures the longevity of your business, although in some cases you might be forced to pay excessive fines. The idea with merchants account is to maintain low chargeback (which is the advantage with a low-risk account), but you need not worry about the bad month (which is why you need a high-risk account).  

How about the negative side? 

Although a high-risk account offers many benefits, some factors must be considered. Some of its drawbacks include; 

• Excessive fees;

All credit card processor impose prohibitive fees to all high-risk clients because they deem them to produce more unavoidable chargebacks and added risk. You will be required to shell out a good amount of money for the setup, at times, plus higher monthly processing fees. For this reason, a high-risk merchant account is an excellent option for business with enormous earning potential.  

• Higher chargeback fees 

For every chargeback received, you will be charged a fee equivalent to the cost of processing it. However, for each instance, you will get considerably higher fees. If you are already in a high-risk niche and you receive excessive chargebacks, the cost will be inflated.  

• Rolling reserves 

When opening a high-risk merchant account, you will be required to create a merchant account reserve. The reserve usually 10% of your monthly sales for six months, and in some cases, more. In case a chargeback is filed against your business, and you are incapable of reimbursing the issuing bank from the normal account, the amount in the reserved will be sued to cover the cost. Technically, the amount in reserve belongs to yours. However, there is restricted access to this money which can spark serious cash flow issues.  

Opening a good high–risk merchant account 

To enjoy the benefits of operating a high-risk merchant account while minimizing the risks, you require the help of an experienced partner. Aretosystem.com work with multiple trustworthy acquiring banks and third party credit card processor to provide high-risk merchant accounts. We are a listening and caring partner you can trust to help you get the best high-risk merchant account. 

Our team of experts has invaluable decade-long experience. In addition, we have a deep-rooted understanding of the complexity of finding a good high-risk merchant account provider. The stringent guidelines followed by most of the financial services providers should not bar from reaching unimaginable heights. We are determined to working closely with merchants like you and helping them to achieve their goals without a hassle. Besides, we’ll not only help you to open the merchant account but also offer assistance that will streamline your business operations.  

Contact us 

If you are willing to succeed and believe the sky is the limit, contact us today and let’s script your success story from scratch. We are a one-stop tower of help for any issue related to all e-commerce businesses. Email us at customer.success@aretopayment.com with any questions or inquiries, or sign-up directly by clicking here.