If you have recently tried to find a credit card processor, only to discover that they have classified you as high risk and are trying to charge extortionate rates to work with you, you may feel like there are few options ahead of you. Working in a high-risk industry like eCommerce, tobacco, or if you are simply a new business is not uncommon, and there are steps you can take to get a reasonable offer that won’t break your bank. If you aren’t sure, then you can find out if your business is high risk by checking out this guide.
1. Be honest about your operations
When faced with high rates, the worst thing that you can do is try to hide your operations to get a better deal. If you hide what your services and products are, this is likely to find out through one of the regular audits that credit card processors do, which will make your situation even worse. If a processor denies you, don’t let this put you off, there are processors available that specialize in working with high-risk business that you can approach.
2. Have capital available
Capital includes assets like equipment, buildings, inventory, tools, and machinery that you use to make income. These assets show that you are well funded and a business that is operating well, giving you the ability to withstand financial turbulence. This will make credit card processors more likely to consider working with you.
3. Show your payment processing history
As well as the capital, if you worked with a payment processor in the past, then make sure to have this information to hand, even if the last company stopped working with you. This will prove that you have a clean record with minimal fraud or chargebacks and that the previous company dropped due to perceived risk rather than real risk.
4. Don’t agree to pre-set limits
Many credit card processors with put a limit on the number of transactions that you are allowed to process, and if you go above this limit you will be charged extra. This may be ok if you are a small business, but if you think there is a chance that you will grow and the number of transactions that you’ll have to process will increase, then avoid this. Look for a partner that will allow you to increase the number of transactions to be processed with no extra charge.
5. Be prepared
This may seem counter-intuitive, but if you can always try to have two payment processors. As a high-risk business, you don’t know when you may hit a number of chargebacks that cause one of the processors to terminate your account. This is out of your control, but you can control the outcome by being prepared. With two partners, you don’t have to worry about looking for a new processor to keep working and can move all credit card transactions to your other merchant.