A Dunce’s Guide To The Key Points Of High-Risk Credit Card Processor

Running a big business is not an easy job. You have to oversee innumerable things to make sure everything is running smoothly. One of the essential aspects of running a business is to enable your customers to pay for the services you offer as flexibly and efficiently as possible. A high-risk credit card processor makes the transaction easy and seamless.

High-risk credit card processors have several other benefits, too. But who needs to hire a high-risk credit card processor? We have enlisted nine merchants who need to hire a high-risk credit card processor at the earliest. This article will also explore the advantages of credit card processing for high-risk merchants.

What Does A High-risk Credit Card Processor Mean?

Before we dive into learning which merchants require high-risk credit card processors, we should discuss what a high-risk payment processor means. A high-risk credit card processor is a merchant account established for businesses that are considered high-risk by the bank.

These payment processors have provisions to accept liability for increased risks such as transaction fraud and chargebacks in return for a standard fee. A high-risk credit card processor monitors every transaction to detect and resolve any suspicious activity that might arise at the earliest. They offer overseas services, too, which is beneficial for merchants who have a worldwide clientele.

Who Needs A High-risk Credit Card Processor? 

As mentioned earlier, a high-risk credit card processor is intended for businesses that are tagged as “High-risk” by the banking system and other financial institutions. But why are they designated as “High-risk”? This is because these businesses have a higher risk of chargebacks and fraudulent transactions.

High-risk businesses also have to deal with high sales volume. These businesses can either be traditional brick-and-mortar organizations or are operated online. They also have a high employee turnover rate. Generally, financial institutions have assumed that merchants working in these nine industries are considered to be of “high-risk” and should hire a high-risk credit card processor:

1. eCommerce

eCommerce platforms deal with customers from all over the world, allowing them to transact in flexible ways. They also allow them to cancel and replace their orders and ask for a refund. These services have the potential for excessive chargebacks, making the business look riskier. A high-risk payment processor accepts such liabilities and makes the transaction process safer and more accessible for both the merchant and its clients.

2. Adult-Oriented Businesses

Adult entertainment services include escort and dating services, online chat or webcam platforms, pornographic and fetish sites, sex toys, lingerie, etc. These businesses need to offer discreet payment gateway for their clients to maintain their confidentiality. Also, adult-oriented businesses stay troubled with chargebacks and fraud. Thus, a high-risk credit card processor is a must for these merchants.

3. Tobacco and Liquor

Tobacco and liquor merchants have to deal with endless regulations and innumerable legal processes. These businesses also have to pay high taxes and license fees. These businesses are also often internationally operated. A high-risk payment processor makes these transactions manageable.

4. Travel and Hospitality Agencies

Travel and hospitality agencies include ticket-booking platforms, hotels, and resorts. These merchants allow clients to transact online and also enable them to request cancellations and reversals. Thus, they run a higher risk of chargebacks, making them an appropriate candidate for hiring high-risk credit card processors.

5. Pharmaceuticals

The Health and Wellness industry is usually an international business that caters to a worldwide customer base. Most of their country-to-country transactions happen online. Also, by trading overseas, pharmaceutical companies can generate more revenue. A high-risk payment processor makes it easier for them to trade offshore and enables seamless transactions.

6. Gambling Businesses

Though a night at a casino might sound fun to some, casinos are money laundering sites that operate with a high risk of fraudulent transactions. As gambling allows people to bet at high stakes, it runs an added risk of chargebacks. Thus, casinos and other online or offline gambling businesses, like lotteries, betting on animal races, etc., are considered to be “high-risk” businesses.

7. Gaming

The gaming business has developed into an organized and profitable gambling platform over the years. And, like all other traditional forms of gambling, online gaming runs an increased risk of chargeback and refunds. These businesses also have the potential for high volume turnover, which is regarded as a “high-risk merchant account” by providers. Hence, gaming businesses are suitable candidates for high-risk credit card processors.

8. Crypto/ Forex Trading

The Crypto Industry and the Forex market work with high trading volume. The currency values and the interest rate can fluctuate dramatically within minutes in these businesses. Forex traders also have to deal with the issues of a currency crisis when the currency of a particular country experiences devaluation. Currency crises can increase the risk of liquidity dangers. A high-risk credit card processor helps these businesses to withstand such liabilities.

9. CBD/ E-cigarettes

CBD and other cannabis products are considered high-risk because of the differing legal status in different countries. Gaining a license for trading CBD products is quite expensive, too. Moreover, the business comes with numerous regulations and legal processes. Also, these businesses operate internationally. A high-risk credit card processor helps manage the liabilities that accompany the CBD business.

What are the Advantages of Hiring a High-risk Credit Card Processor?

You cannot understand the true sense of a subject unless you understand the benefits of that subject. This section will deal with that. Here, we will list some of the most prominent benefits of high-risk credit card processors that you just know about. 

a. Access to Advanced Security:

High-risk credit card processor utilizes several advanced tools to ensure safe and secured online transactions. These tools are protected with a multi-layered security system and enriched with features that can help detect fraud and malware. As a result, it can help keep the merchant’s money safe.

b. Generating More Revenue:

A high-risk payment processor allows merchants to accept recurring transactions even with a risk of chargeback. This helps them boost their profit and also retain clients for the long term. The services offered by high-risk payment processors ensure consistency in revenue collection.

c. Increased Chance of Global Growth:

A high-risk payment processor provides a seamless online payment gateway that helps attract more clients from across the globe and accept payments from all over the world. The payment processor also allows currency conversion.

The Bottom Line:

We hope this article has successfully delivered information about the high-risk credit card processor and why they are necessary for some high-risk businesses. 

These payment processors have multiple benefits which make running a complex business easier, and they also accept all the liabilities that come along with these businesses.

Additional Reading:

• High-Risk Business Merchant Services Features
• How Can Financial Institutions Expedite Their Operations?
• How To Find The Right Credit Card To Suit Your Requirements!