If you are doing online business with more risk of chargeback and want credit card processing for small businesses, you should have a high risk merchant account. But before that, you have to know about a high risk merchant account and its importance.
What is a High-Risk Merchant Account?
It is a payment processing account for businesses that are considered to be of high risk to the banks. High-risk businesses are more prone to chargeback so they come with higher fees for tier merchant services.
If your business comes with higher chances of chargeback, or your business history shows many previous chargeback and payment refunds, your acquirer bank may put a rolling reserve amount (money that would cover the chances of fraud or chargeback) on your merchant account. Many companies provide platforms for credit card processing for small businesses.
Benefits of a High-Risk Merchant Account
It seems that there are so many drawbacks of having a high-risk merchant account including higher fees and more processing charges but here are 5 benefits of having such an account for your business.
1. Global Coverage
Every online business owners want to take their business to a global level where they can access larger markets. If you have a High-risk merchant account, you can grow your business by accepting payments in multiple currencies and you can sell your products or services to clients of foreign countries at low risk.
2. High Chargeback Protection
If you have a regular merchant account and once this account crosses the chargeback threshold, your acquiring bank may terminate your account. It would take time to reopen your account and during this period, you can’t accept online payments. Even opening a high risk merchant account would take time and it may hamper your business growth.
If you already have a high risk merchant account, such a problem would never happen. It’s more beneficial to have a high risk merchant account in a running condition, as a single chargeback exceeding doesn’t end with closing your account. However, it doesn’t mean that you can neglect your chargeback management.
3. Business Expansion
With a low risk merchant account, you can’t sell some restricted services or products. But you can do business with such products or services by using your high risk merchant account. So, it would create more opportunities for the long-term growth of your company.
4. More Profits
Through a high-risk merchant account, you can accept payments from many countries. You can do business at an international level and it will increase not only your products or services selling but also your profits.
5. Customer Satisfaction
When your account offers local currency exchange, different credit cards payments options and improved security, your customers would be more satisfied. When your customers enjoy hassle-free payments, they are more likely to refer your service to others.
Takeaway
High-risk merchant accounts are for high-risk businesses that are more prone to chargeback. Opening a high-risk merchant account is important for your online business as it offers so many benefits like business growth, protection, global coverage and more profits.
Also Read: How to Choose the Best Point of Sale Systems for Your Business?