What are the Cons and Pros of High-Risk Merchant Account?
Pros of High-Risk Merchant Account – Getting a “High Risk” Merchant label are not dreamt of. There are many businesses that are considered as a high-risk business and many payment processing companies do not want to work with them. But sometimes, we ignore the benefits of having a high-risk business.
Here we are going to discuss the pros of high-risk merchant account. When discussing the pros the cons should also be considered. You will get the complete information related to the high-risk business and merchant account. If you have any further query, feel free to contact Merchant Stronghold at the toll-free number +1(888) 622-6875.
What is a High-Risk Business?
In a simple language, the business with greater risk can be put under this category. What is the risk in a business that makes it the high-risk business? It depends on the industry you are investing in or the kind of clientele you have. Moreover, the risk department decides which business should be put under the high-risk or low-risk business.
Factors leading to a High-Risk Business are:
- You have lost your previous merchant account or the business
- Your business includes high chargeback ratio
- You own an international business
- The business has low or no business credit history
- Dealing in multiple currency and country
- Your business deal in subscription-based products.
Examples of a High-Risk Business are:
- Casino and Gambling Business
- Pharmaceuticals or drug stores
- Airline tickets
- Forex Trading
- Tech support
These are some examples of the high-risk businesses. Also as you can see, some of these businesses are one of the high-profit businesses. In addition, one of the pros of High-Risk Merchant Account can be associated with profit.
Cons of Having a High-Risk Merchant Account
Now a business owner has to get a merchant account. This account is used to carry out the transactions of the merchant. Now if your company has too many numbers of chargebacks then your account will be referred to as high-risk merchant account.
There are many reasons a merchant do not want to own a high-risk merchant account, these are:
- Excessive Chargeback Fees – The Bank already considers that the high-risk business will produce a number of chargebacks. In order to deal with the chargebacks, bank charges extra chargeback fees to deal with them in future.
- Need to create a Merchant Account Reserve. For the high-risk business, the bank asks them to open a no-interest saving account. This is done to deal with an unexpected number of chargeback in the future. If someday merchant is asked to pay a large sum due to a chargeback then this account will be used to pay off the customer.
If you are at risk of becoming a high-risk business due to growing number of chargeback in your enterprise then get an expert to assist you. Contact the Merchant Stronghold at the toll-free number for such services.
Pros of Having a High-Risk Merchant Account
There is also a bright side to own a high-risk business. It is hard to believe but high-risk business can actually help you earn more profit than other businesses.
Pros of High-Risk Merchant Account are:
- Great Earning Potential. The payment processor limits the revenue rate for the low-risk business. But the high-risk business has no limit when it comes to earning and expanding the business.
- Risky Products lead to More Profit. When you own a high-risk business account, you can sell almost anything in the market. This is one of the Pros of High-Risk Merchant Account that makes it the most profitable business.
- Worldwide Expansion. If you own a high-risk business then you have all the access to expand your business beyond boundaries. You can deal in any currency with the desired country.
When it comes to earning the profit, high-risk business is the best. Also, you can say the Pros of High-Risk Merchant Account is a great profit.
Chargeback and Profits
Chargebacks and profit cannot go hand-in-hand. Chargebacks should be decreased in order to gain in any business, low risk or high risk. No matter how many Pros of High-Risk Merchant Account you have, you will eventually face loss if the chargeback is not controlled.
If you own a high-risk business and need tips to overcome chargeback in your enterprise, then you can get a chargeback specialist at Merchant Stronghold. Contact us at the toll-free number or reach us using the Skype chat.