Trying to obtain a high-risk merchant account can frequently prove to be a challenging task. In addition to the fact that very few credit card processors are willing to work with high-risk businesses, the entire process can often be quite frustrating and time-consuming. One of the primary reasons that the application and approval process can be so difficult and take so long is the amount of risk the processor must usually take into account. Understanding that level of risk can help you to improve your chances of being approved.
As you may or may not already be aware, there are certain industries that are typically considered riskier according to credit card processors. Such industries often include adult entertainment, affiliate marketing, pharmaceuticals, outbound telemarketing, and gaming. One of the reasons such businesses are considered risky is the regulatory environment that surrounds such industries. The potential for merchant fraud can also increase the risk level associated with these businesses. Although this is not the case with all businesses, there are many websites that simply serve as fronts for operations that are illegal or restricted. In addition, the risk of charge-backs is also considered problematic. Finally, credit card processors are often considered about issues related to declined transactions. In fact, the rate of declined transactions can reach about one-third in many businesses.
In reviewing your application, the credit card processor must take all of these potential risks into consideration. At the same time, it is necessary to ensure that all of the documentation you submit is valid. Ultimately, the processor must evaluate your application and determine that the benefits of underwriting your account exceed the potential risks. If your business is not able to provide a sufficient volume, the processor may still decide that the amount of work involved is simply not worth it.
This naturally leads to the question of what you can do to improve your chances of approval. One of the most important things you can do when seek a high-risk merchant account is to make certain that you submit all required documents in a timely manner. This will not guarantee approval, but it will certainly improve your chances. If the processor makes any additional request, provide the information needed promptly. By dragging your feet or being argumentative about required documentation, you could make it appear as though you have something to hide.
Although it may not seem fair that it is often so difficult to obtain a high-risk merchant account, there are often very good reasons as to why the process is so challenging. By understanding the way in which credit card processors operate and what they take into consideration when reviewing applications, you can enhance your chances of being approved.