Risk management is an essential tool for anyone looking to run a successful business, particularly when their market is considered to be “high-risk” (i.e., bad credit merchant accounts). An unexpected surprise can destroy a business, no matter how successful they have become. While external risks are out of your control, risk management strategies can help your business prevent disaster and, at the very least, mitigate some of its effects.
In this article, we are going to discuss some of the ways in which you can maximize your business. From what it means to be “high-risk” to a few fundamental steps you can take to elevate your business to its highest potential. Continue reading below to learn how to turn high risk into sure gains for your business starting today.
If you’re a business with a less than ideal credit history or credit score, it may be challenging for you to find a merchant account that will work with you. Every business deserves a second chance, and High Risk Pay wants to help. Contact us today if you’re a bad credit merchant account, and you could receive an approval within 24-48 hours.
What is a High-Risk Merchant Account?
A high-risk merchant account is a payment processing account that is considered to be of high risk to banks. As high-risk companies are more inclined to customer chargebacks, they also come together with the requirement to pay higher prices for merchant account services. If a company has a history of chargebacks, especially a large quantity of them, a lender may place a reserve on your merchant account, requiring you to pay more for their services due to the possibility of chargebacks or fraud.
Essentially, the more chargebacks a company has, the higher the risk.
If you are wondering if your business is considered high-risk, here are some of the overall features a high-risk merchant account:
- More than $20,000 in monthly sales.
- Average credit card transactions greater than $500
- Sells services and products to countries known for higher levels of fraud.
- Poor credit history.
- History of excessive chargebacks.
Tips to Turn Risk into Reward
If your business is considered high-risk, here are a few tips that could help you turn that risk into gain.
Create a Relationship with Your Merchant Account Provider
It’s pretty simple. If you have a stable payment processor, you will be able to facilitate customer transactions on your platform more easily. However, if you do not, your revenue stream could be cut off at a moment’s notice, not only leaving your customers frustrated but also leaving your orders empty. Figuring out how to prepare your high-risk merchant account for this possibility and working with your merchant account provider to find ways to keep it open are necessary to operate in any high-risk industry.
There are several essential things to take into account throughout the merchant account application process; however, being transparent is number one. Maintaining accurate records of all of your financial documents, tax documents, business permits, and everything else required to run a company in an organized manner is essential to maintaining daily operations. Most high-risk merchant accounts are inspected for fraud more regularly than others, which makes this step even more crucial.
Don’t Push for Higher Volume
As a high-risk merchant account, you are likely going to have a much lower-than-average processing volume during the first couple of months of working with a merchant account provider. While this isn’t favorable, it is often part of the process. Luckily, after maintaining consistent and transparent business operations, and a little bit of patience, you will have the ability to renegotiate your rates, putting your business in a much better position for the future.
Keep Chargebacks Low
Keeping a low chargeback ratio is one of the best ways to ensure a favorable relationship with your merchant account provider. Ideally, you want your chargeback ratio to be one percent or lower. However, each provider has different guidelines in regard to what is acceptable or not, so be sure to communicate with them to determine how to improve your ratio.
Improve Customer Service
While unfortunate, some chargebacks are simply due to clerical errors, which is why it’s crucial to have a knowledgeable and well-trained staff. Establishing a customer support team that is always available to work with your customers and handle any customer complaints, while also being well versed in your organization’s policies is critical. If hiring a customer support team is not a possibility, make sure each customer knows when they will be able to contact your business.
Be Easy to Contact
Along with excellent customer service, be sure to make it clear to each of your customers how they will be able to contact your business with any questions or concerns they might have. Whether they can contact you by telephone, chat, or email, be sure to include this information in a location where customers can easily see and navigate to the information. Additionally, because most customers ask similar questions, you might also want to consider adding a Frequently Asked Questions (FAQ) page to your website.
Work With a Merchant Account Service You Can Trust
Risk management is a necessary measure for sustainable success with any business. In order to grow and increase the revenue of your business, you will need to get a solid foundation in place. By following the above steps, you can take the necessary first steps to mitigating risk with your company.
There are lots of reasons why your company can be considered a high-risk, but if you establish a high-risk merchant account with a dependable payment processor, you can allow yourself to focus on the things that matter most with your business. At High Risk Pay, we strive to help all of our customers find suitable payment processing services that are tailored to their unique business needs. By working with us, you not only can help build trust with your customers but also provide them with services that can aid in the future growth of your business.
Are you wondering whether your company needs a high-risk merchant account? Contact High Risk Pay today to learn more about how we can help.