Coming To Terms With Your High-Risk Classification

Wednesday, June 17th, 2020

Your business identifies as risky or high-risk if its products fall under sectors that banks consider high risk.

Such enterprises serve in unique models, sell restricted products, or use tricky payment designs like subscription billing, which are more likely to incur excessive chargebacks.

What Makes One “High-Risk”

There are half-a-dozen reasons a bank term you as high-risk? Here, we narrow down to the primary factors that can lead to such a classification;

• If your sector appears the list of High-Risk Industries
• Excess chargeback rates
• You take lots of high-value transactions
• You accept multiple currencies
• A startup company with poor credit or no credit background
• Your company issues multiple returns and refunds

Lastly, you also be considered risky if you appear in the terminated merchant file due to piling chargebacks, which led to a terminated contract with your previous service provider.

Many times, these sectors are considered high risk;

• Firearms
• Adult
• Dating
• Pawn Shops
• CBD
• Subscription Boxes
• Business Consulting
• Continuity Billing
• Marketing
• Credit Repair
• Vape
• Travel
• Auto Warranties
• Airlines and Booking
• Coaching

Similarly, most of the businesses listed above show the above risk factors, which increases the likelihood of a high-risk terming.

So What If You’re High-risk?

But a high-risk labelling doesn’t make you an outcast in the world of business thanks to a set of service providers who process payments for high-risk companies

Best Payment Providers UK, for instance, is a high risk merchant account and payment processor who will consider any worthy application from a legally registered business.

The application process is super simple, and acceptance rates are high. Plus, you could have an active merchant account in a matter of days.

You also want to find out the necessary credentials upfront to increase the chances of a successful request.

The Bottom Line

Excess chargebacks are the nightmare for many credit card processors.

A high rate of these “forced credit card refunds” can put off a perfectly willing service provider. It is also why you could lose your current payment processor, so you want to avoid them as much as possible.

Apart from setting up your defenses, it helps to partner with a service provider who cares about your chargeback safety.