We work with merchants to help them get the high-risk credit card processing they need in Tampa and beyond. Most merchants go into their industry knowing that their business is considered to be high-risk and that they will need to take additional steps to set up merchant accounts in order to process credit and debit cards. Some new business owners aren’t aware that their industry is considered to be high risk and are surprised to find that the process can be difficult and slow when they aren’t working with the right team. Whether you are a seasoned high-risk merchant or brand new to the industry, you might not know why your business is considered to be high risk. Understanding what industries fall into this category and what puts them there isn’t just interesting; it can also help you make better decisions for your business and partner with the right processor.
What Industries are Considered High Risk
Wondering if your business is considered high risk? If you fall into one of these categories, the answer is likely yes.
- Debt collection. This includes debt consolidation, as well
- Gambling. That includes fantasy sports teams and online gambling.
- Alcohol and tobacco. You might be surprised to learn that e-cigarettes are in this category as well.
- Payday loans. Any fast, high-interest loan service will be considered high-risk.
- Dating services. Escort services are included in this category, as well.
- Charities. You may be doing good work, but charities raise a red flag for credit card processors.
- Monthly memberships. Whether it’s a magazine subscription or your favorite subscription box service, it’s high risk.
- Downloadable software. Surprising only because this is the most common way to get software now.
- Tourism. Including hotels, tours, timeshares, plane tickets, and virtually anything to do with the vacation and tourism industry.
- Drug products. This includes drugs, paraphernalia, neutraceuticals and some pharmaceuticals.
This is just the beginning! There are many other industries that bank and financial institutions consider high risk. But what puts them on this list? And what can you do about it?
What Makes Your Business High Risk
- The industry has a historical risk of criminal activity. This includes the gambling and escort services listed above, which may be operating in a legal gray area that could put the operation at risk.
- Chargebacks are a common occurrence. Chargebacks are a nightmare for the merchant and a risk for the processor. Too many chargebacks can put you on the high-risk list even if you aren’t operating in one of the industries listed above.
- The service or product is considered taboo. This is more of a public relations issue than anything else. Merchants that sell drugs, run escort services or operate gambling businesses may be considered high risk if only because of the taboo associated with their industry.
- The business isn’t regulated by a local agency. No oversight means your business could be operating under illegal or shady practices. While you might be completely on the up and up, it is hard for a processor to be sure if there is no oversight.
- The business is too small to have sophisticated fraud protection. Fraud is an issue for processors and if your business is too small to have sophisticated fraud protection put in place, you could be putting them at risk.
- You have poor credit history. Your own history could be what flags your business as high risk. If you have bad credit or a history of bankruptcy, processors may be reluctant to work with your company.
- You work in multiple currencies. This includes Bitcoin, which is still seen as a risky currency among processors. You’ll want to work with a processor who has experience with Bitcoin and other currencies.
The two biggest factors when it comes to being labeled as high risk are chargebacks and fraud. This cost the credit card processor money, not to mention are detrimental to your business. If your industry has a history of these two things, chances are you are going to be on the high-risk list. Your goal will be to find a credit card processor who has experience working with high risk businesses and can help you find a better rate.
What To Do If You Are High Risk
The most important step that you can take as a business in a high-risk industry is to reduce your chances of fraud, work to prevent chargebacks, and partner with an experienced high-risk credit card processing company. They’ll understand the unique nature of your business and can offer helpful advice and great rate that allow your business to stay competitive in your industry.
Are you looking for a suitable high-risk credit card processor to partner with your business? Get in touch with Nationwide High-Risk Credit Card Processing by giving us a call or contacting us through our website. We’d love to speak with you about your business’s needs and how we can help!