Merchant services providers often steer clear of challenging accounts. Part of this comes directly from the processing partners with which you work; larger financial institutions limit flexibility in taking these on, based on their own risk assessment process. Unfortunately, those limits also create barriers for you in taking on some strong businesses. If you work with the right payment processing partner, you can take on more accounts and greatly enhance your bottom line.
Many industries get painted with broad strokes as high risk, due to higher numbers of chargebacks than others. These can include many profitable businesses in the following categories and more.
- Airlines or Travel agencies
- Debt collection
- Cannabis shops
- MLM or Direct Selling
Partnering with a payment processing provider willing to take these accounts opens doors that more traditional providers keep closed. Instead of making a predetermined call based on an entire industry reputation, we evaluate the risks separately and price them in. You can work with companies that need a payment processing provider, and build your business more effectively.
If you work with the right partner, working with a complex vendor relationship can be more secure for you. The inflexibility of traditional processing providers extends beyond the initial application. After a certain number of chargebacks, they often terminate accounts as a matter of course. In addition, they provide security measures for card information that may not meet the most current standards, but only meet the risk they expect to take on with a new, low-risk client.
With tightly regulated processing, the risk of chargebacks is baked into the fees charged. Instead of terminating your relationship with a merchant, they become a part of the formula that goes into the contract you have with them. This allows you to not only continue on with a high-risk merchant, but to do so in a way that remains profitable to you. Further, the technical security measures in place help protect financial information for the merchant and its customers, giving everyone a little extra peace of mind and reducing risk of identity theft that might hurt your own business along the way.
Greater Revenue Potential
Working with potentially high-risk merchants opens up your revenue potential in two important ways. One is the fees you generate. When you sign these merchants on, you do so with a higher margin to account for the additional risk. The more flexible assessment does not ignore risk; instead, it gives you a cushion to absorb it. The companies signing with you gain the ability to process payments that traditional providers would not allow, and you get a greater profit margin in the bargain.
In addition, working with higher-risk companies broadens your prospective pool of merchants. You can grow more quickly and work with more potential businesses. It expands your ability to gain market share and build a successful business. All businesses take on risk. Doing so in an effective, business-savvy way gives you an edge over those that will not.