The Difference Between High Risk and High Volume Merchant Accounts
The difference between a high risk and a high volume merchant account can be confusing. This is especially true when you consider that a high volume merchant often falls into a high-risk category.
Let’s bring in some clarity by defining just what these merchant accounts are and what businesses need them.
What Is Considered High Volume?
Most merchant accounts come with a transaction or processing limit. One merchant account provider may set that limit at $2,000 per month while the largest credit card processors may raise the limit to $10,000.
Several factors go into determining a business’s transactions per month limit. High volume usually refers to those merchants that process a minimum of $100,000 per month.
Benefits of a High Volume Merchant Account
Operating with the end-game in mind is a recipe for success. If you see your business increasing transactions or customers purchasing large ticket items, a high volume merchant account is highly recommended.
A merchant services provider protects their business, you, and your customers by keeping a wary eye out for scammers. Thieves will run credit cards up and collect income from fraudulent merchant accounts.
As a way to limit theft, providers keep an eye out for merchant accounts that go over the transaction limit or excessively large ticket items that have not been pre-approved.
Should either of these occur, funds are placed on hold and, if questions remain, your account may be suspended.
Obtaining high volume merchant accounts before this occurs sets you up for success where the sky’s the limit. In addition to increased income due to higher processing volume, you may also experience reduced costs.
A merchant service provider will often reduce fees due to the high volume passing through your account.
With high volume and large ticket items, security is considered paramount. This leads to payment processors providing secure detection systems to limit theft.
Types of High-Volume Merchants
Any retail business or business owner with a transaction volume of over $100,000 a month is considered a high volume merchant.
To determine if you need high volume merchant accounts, a credit card processor looks at your total amount in credit card receipts as well as the price of single transactions. A merchant service company will also examine both sales volume and processing history.
By their very nature and the products and services they deal in, several business models usually require a high volume merchant account. A business or company that often falls into this category include the following:
- Property management firm
- Travel agency
- High-end retail merchant
- Auto dealer
- Subscription or membership service
- Bail bond
Documents Needed When Applying for a High-Volume Merchant Account
The process for applying for a high volume merchant account is similar to applying for a traditional merchant account. In order to start the process, you will need the following documents:
- Recent bank statements
- Recent processing statements, if applicable
- Social Security number or employer identification number
- A government-issued ID or driver’s license
- A copy of a voided check
- An operational website
Is There a Difference Between High Volume and High-Risk Merchant Accounts?
While there is a difference between these two types of merchant accounts, a high volume merchant account can be considered a high-risk account.
Let’s take a look at the two and clear up some of the confusion.
A high-risk merchant account is usually provided to businesses that are considered high risk. Several factors go into considering if a company falls into this category. One consideration is if they have had a problem with their credit, or if a previous merchant account was closed.
For others, their business model falls into the high-risk category. Just a few of the many types of businesses that are considered high risk include companies that sell cannabidiol (CBD), adult products, e-cigarettes, alcohol, nutraceuticals, collection agencies, firearms, dating websites, large-end furniture stores as well as eCommerce sites.
High volume accounts, on the other hand, are available for those businesses that process at least $100,000 per month.
Businesses that can usually benefit from these types of accounts include merchants that charge recurring monthly or annual fees, property management companies that process monthly rental payments and companies that sell large ticket items.
What Kind of Cards Can I Accept With My High Volume Account?
Payment methods work much the same way as a traditional merchant account or credit card payments processing service.
While high volume merchant accounts vary, most allow you to accept all standard credit cards. Make sure your merchant account providers verify the payment methods you’ll be able to accept as well as their credit card processing procedures.
How Do I Obtain a High Volume Merchant Account?
To obtain a high volume merchant account, simply fill out a quick and easy online application and send the requested documents.
What If I Requested a High volume Account and Received a Much Lower Processing Limit?
All merchant account providers are not created equal. Some of the largest merchant processors approve a lower processing limit because of outstanding bills, negative bank balances, or a previously terminated merchant account.
Others consider chargeback volume and if you fall into the high-risk merchants’ category.
Some companies apply at the cheapest merchant account services thinking they will save costs. Unfortunately, they may end up with a lower processing limit that reduces profits.
At High Risk Pay, our underwriters review your credit scores, credit card processing history, bank statements, and websites.
We make sure that your website is secured by an SSL certificate and displays privacy and refund policies.
Our goal is to help your business succeed. Ensuring that you have the right payment processing systems in place is part of that equation. If any red flags appear, we work with you to clean up the past so that you can get on with a bright future. Minimizing chargebacks and creating a positive transaction history results in higher volume accounts.
Don’t hesitate, apply for a high volume merchant account with one of the most trusted high-risk merchant account providers.
The application process is quick and easy, and our customer service support center is there to help you with the process. Contact us at High Risk Pay today!
