First-time entrepreneurs in high risk industries face the harsh reality of payment processing in America.
As the country slowly shifts to cashless and digital transactions, business leaders in high risk industries such as online gambling, adult entertainment, Forex services, and tourism, struggle to get card processing services from issuing banks.
Most customers now expect to pay with their online wallet or credit card. Offering a platform for these transactions is now a necessity for all businesses regardless of size or industry. However, major financial institutions are unwilling to offer the same rates, terms, or convenience to businesses they deem “high risk.” If your business is part of this group, you should consider a high risk merchant account from a reputed provider to streamline your transactions and reduce your transaction costs.
Here’s what you need to know about high risk merchant accounts and their impact on your industry:
- Your customers expect payment convenience
While 70% of consumers still use cash regularly, America is following the rest of the developed world towards a digital economy. A majority of consumers have made at least one e-commerce transaction in the past year. Many of these shoppers rely on credit/ debit cards, ACH eCheck payments, or digital wallets. There’s no doubt that your customers expect this convenience both online and offline.
- Competition is intense
A JP Morgan survey found that nearly a 70% of all merchants accept cashless payments of some form. This means most of your competitors offer this convenience and your ability to take card and digital transactions defines your competitive advantage. The same survey also found that only 25% of small businesses accept these payments, so if your business is small, you have a genuine opportunity to stand out.
- Chargebacks are a major risk
Statistics from the Federal Reserve Bank of Kansas City should give any merchant a moment’s pause. Chargebacks can be worth nearly 6% of sales for the average merchant. A majority of these chargebacks are due to fraud and the liability is generally assigned to the merchant. Merchants in travel, tourism, and restaurant businesses are at higher risk. The study doesn’t cover high risk businesses because these operators find it difficult to get payment processing services from issuing banks and usually operate through a high risk merchant account.
- Your profits are at stake
The risk of fraud, and chargebacks, combined with the high fees for payment transactions from issuing banks can chew into your bottom line. A high risk merchant account, with its built-in security features and customer services, can help you streamline your transactions and maintain profitability.
- Getting a high risk merchant account is easy
If you manage a high risk business venture, applying for a high risk merchant account is relatively easy. A payment processor can offer you a free trial for a limited period and ongoing service and assistance for your high risk merchant account. Domestic accounts can be opened within a week and international accounts can be started within 21 days. Since getting a high risk merchant account is so easy, you can expect a growing number of your competitors to adopt these platforms soon. Don’t get left behind.
Legitimate businesses in high risk industries often face challenges while accepting payments from their customers. While customers expect to make cashless transactions, issuing banks make it difficult or expensive for these businesses to offer this convenience.
A high risk merchant account may be the perfect solution for such businesses.
Is your business high risk? Do you want to boost profits, cut costs, reduce chargebacks, and offer convenience?