high risk

Some Business Types are Considered Risky For Card Processors

Every modern business knows the importance of being able to process credit card transactions and how the income from these transactions is critical to being able to grow and profit. The problem for many small businesses is that despite hard work, honest dealings, and great credit scores, they find themselves being rejected again and again every time they apply for a merchant account.

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The truth is that certain industries as a whole are simply considered high-risk because of the number of issues many processors have in that industry. Some of these are beyond the control of the business. For a dating or adult website, you’re going to have people signing up for a free trial, forget to cancel and are then charged for full access. They then deny it and ask for a refund. A teenage son or daughter might rack up charges that the parent then challenges. These charge backs cost money and that’s a consequence of the industry.

There are a large number of industries that are considered high-risk partners for merchant account providers. The following List of High Risk Business Types is just a sample of some of the “high-risk” industries that will struggle to find (and pay more for) a credit card processing service:

Travel industry
Adult websites
Dating websites
Web hosting
Any membership or online MLM organizations
Auction websites
Electronic cigarettes (especially online)
Calling cards

Anyone who has a business in any of these industries is going to struggle to find a quality processor for credit cards. This is still a service that needs to be pursued by all business owners operating in these fields!

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Why are these industries (and others) considered high-risk?

The exact reason varies from one to another but there is usually one common thread; a high number of requested or required cancellations. Every time a charge is made, this requires effort and work. A chargeback costs the processing company as well. This makes high chargeback industries less profitable and in some small business situations can mean it’s unprofitable to work with certain people.

This is why people in these industries not only have to search harder for higher risk merchant accounts but they also often need to pay more for the same service. Now, depending how the business goes over months and years of partnership, some of those rates may be reduced over time with negotiations. In the beginning, those business owners will need to be willing to budget more for the service.

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In Conclusion:

No one said finding a good merchant account partner was going to be easy. But small business owners know how to work through much bigger challenges than this in order to succeed! Understand the inherent risk that causes merchant account providers to see your field as being high-risk. Control the few things you can to be a great business partner, helping to see things through, and you will profit from being able to accept credit cards. Please click Here for – Additional Information.

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