What is a High Risk Merchant Account?

What is a High Risk Merchant Account?

All merchants can be broadly broken down into three different categories. These categories are low, medium and high risk. The category risk they are defined in is down to the industry they operate in. There are a number of things that can make a company high risk, such as being a startup due to a lack of credit history. A business can also be considered high risk if they service high risk industries, such as CBD, Nutraceuticals, E-commerce or Fantasy sports.

What makes a wider industry high risk can be down to a number of factors. These factors range from whether the industry is prone to chargebacks, or theft, or even depending on it’s legal standing- just because an industry is legal today, doesn’t mean it will stay that way forever, therefore increasing the risk associated.

As a result of these risk factors, merchant providers are likely to either charge far more for their service to mitigate this risk, or just avoid them altogether. This drives up costs for the merchants who operate in this space or simply makes it harder to find a merchant provider who can help.

What to look for in a provider?

When looking for a payment provider to support high risk merchants, it’s important to ensure they have great support, customizable API integration, and most importantly open and fair pricing.

Ensuring the payment provider has the best in market support is going to go a long way in the relationship. Great payment providers will have fantastic support on hand, all the time, so if something goes wrong (and it will) they can be able to assist and resolve it immediately. This is especially important in high risk industries where trust may not be established. Being able to resolve queries immediately can help merchants grow a good customer base and critically growth.

Any payment provider should be able to have a flexible and highly customized integration onto their customers’ platforms or websites. This customization is critical for businesses to be able to foster trust between customers and themselves. Added to this, a fully customizable payments provider can allow merchants to keep their customers on their site, further building the trust base required to build a customer base.

Key to any relationship, but even more so here is pricing. Ensuring the payment provider has both competitive pricing, but also transparent pricing is key to ensuring there are no hidden costs. Added to this, knowing the full pricing structure (including chargebacks), can help ensure all costs are accounted for when pricing your products.

Partnerships and integrations with other platforms are something to pay attention to. With outsourced products being integrated into a payment provider’s platform, it allows merchants to access best in class products through their payment provider. This allows merchants to minimize the amount of time and resources needed to go out and find, purchase and integrate those features.

How can Cathedral Payments help?

Cathedral Payments can help merchants operating in high-risk spaces in a number of ways. From being able to support multiple eCommerce and gateway integrations, 24-hour deposits, BNPL, digital current acceptance, chargeback mitigation tools to name a few. Cathedral Payments is a great option for anyone operating in a high-risk industry!

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