Credit card processors take on significant risks every time they approve of a merchant account, which is why they ensure all merchant account holders go through a thorough underwriting process. If their client goes delinquent, lags on payments, or falls victim to cyberattacks, their institution sustains substantial financial losses. To mitigate the associated risks, merchant account providers limit their services to qualified accounts.
When getting a merchant account, the underwriting process can be lengthy. Merchant service providers will assign your payment processing risks based on your industry type, credit history, business tenure, financial strength, cash flow, profits or losses, billing methods, and chargeback history, among other variables.
While merchant service providers have varying qualifications, they often prioritize businesses that have:
Note: Most of these are earned qualifications. You can build them up over several months by following a solid business expansion strategy. Overall, strive to create a low-risk business entity.
Don’t worry if your business doesn’t qualify for traditional merchant accounts. Even thriving businesses can have trouble qualifying for an account if they come from a “risky” industry. For instance, the eCommerce retail industry values $4.28 trillion, but commercial processors still reject entities from these sectors simply because they process overseas payments.
Explore your options! Dozens of third-party merchant service providers offer high-risk merchant accounts. With the broad range of processors available, even an eCommerce startup selling CBD oil and e-cigarettes can process card payments online.
Is your business struggling to get approved for a merchant account? Processing Card recommends trying high-risk merchant accounts! Here are some merchant service providers that cater to risky businesses.
Wilbur Graham has been writing about mobile payments and POS systems since 2012. He got his degree in Marketing at California State University.
