If your business is considered High Risk and is in need of a merchant account to accept credit cards – look no further.
High risk merchant account providers are notorious for poor service, outrageous rates, and withholding funds. With a team of ETA CPP professionals experienced in getting businesses like yours approved with competitive rates and outstanding service for over a decade you are sure to enjoy the Merchant Doctor Difference!
When it comes to high risk merchant account service, The Merchant Doctor is an industry leader. All of our merchant services include:
- Speedy Approvals
- Dedicated ETA CPP Account Managers
- The Fraud Prevention Tools Your Business Needs
- High Risk Accounts of all types eCommerce, MoTo, Mobile & Retail Accounts
- Both International and Domestic Payment Processing
- No Hidden Fees
- Chargeback prevent programs
- The Service your Business Deserves!
- Proven Results With Stability You Can Count On!
What is a High Risk Merchant Account?
“Why is my business considered high risk?” is one of the most common questions our payment professionals get. The answer to this question has a lot of possibilities. Here are five common reasons:
- Chargebacks. To put it simply think of a merchant account like a line of credit. Transactions are completed and funded to business owners before the bank is actually paid so if your industry or product has a history of generating a high percentage of chargebacks your business will be considered high risk.
- Legality. Often times businesses are operating in a legal grey area (like Cannabis and some nutraceuticals). Due to banks being concerned about brand damage or potential liabilities these businesses are considered high risk.
- Morality. This is an often disputed reason but businesses that are considered morally ambiguous, unscrupulous, or indecent will be considered high risk.
- Trial programs. Due to the high amount of chargebacks that generated from trial programs, especially in the nutraceutical industry trial programs are often considered high risk.
- International services. Businesses providing goods or services internationally will also be considered high risk. This is because it is much harder to know your customer, shipping is often slow, and consumers often have unrealistic expectations of the service or goods they have paid for. This is a leading cause of chargebacks and fraud causing these businesses to be considered high risk.
What is a reserve account?
Simply put a reserve account is a portion of funds from your transactions that are set aside. The funding bank holds these funds in a separate account protect both the business owner and credit card processor in the event the merchant is exposed to unforeseen risk or excessive chargebacks. Upon cancellation of the merchant account the funds being held in reserve will be released according to the merchant account agreement (generally 180 days after the last transaction). There are three common reserve accounts and are each are applied by the funding bank bank depending on the level of risk assessed:
An up-front reserve is most commonly used for merchants who have no or very limited processing history. The reserve amount is based on the merchant’s stated monthly volume. Usually the reserve funds can be collected by holding back 100% of sales until the reserve limit is met or the merchant is occasionally required to provide the funds as a condition of an approved account.
An accrual reserve is again a fixed reserve amount that is funded by taking a percentage from the your daily sales until the required amount is reached or satisfied.
The most common reserve account used by acquiring banks is a rolling reserve. With a rolling reserve model the processor will hold a fixed percentage of sales for an agreed upon time period regardless of sales volume. The amount held is commonly between 5% & 15% in perpetuity however funds that have been in reserve for 180 days will be released so the reserve account represents the average of your last 180 days of sales volume.
Account Reserves can be daunting, however, with a reputable high risk merchant account provider like the Merchant Doctor you won’t have to worry that funds will never be seen again.
What is the application process like for a high risk payment processing account?
When you are applying for a high risk merchant account expect to go through a more rigorous process than a traditional merchant services account. A few things to keep in mind:
- Make sure that your application is completed thoroughly and honestly. There is no point in hiding information and withheld information can lead to a declined merchant account.
- DO NOT apply with multiple high risk merchant account providers. High risk processing banks are very thorough and will know if you have multiple applications out making them more likely to turn you down.
- Do make sure that you provide all requested documentation in one package. Underwriters tend to like not having to ask for additional supporting documents and also tend to place incomplete packages on the bottom of their inbox!
- Do ask your representative where they will be submitting the application, what general terms they tend to see from this provider, and if there are any potential downsides to their preferred processor
Here is a brief list of the documentation that you can expect to be asked for from a reputable high risk merchant account provider.
- Completed Pre-Qualification Form.
- Articles of Incorporation showing directors, shareholders and beneficial owners.
- Business License.
- Voided Check/Signed Bank Letter of good standing. (NO STARTER CHECKS)
- Copy of owners/directors Driver’s License or Passport. (Must be valid)
- 3 – 6 months of previous processing statements. (Excel sheets/screen shots are not acceptable)
- 3 – 6 months of business bank statements. (Excel sheets/screen shots are not acceptable)
- Recent utility bill less than 3 months old.
- Screen shots confirming domain ownership of websites.
- Marketing Material.
- List of products sold with pricing. (If applicable)
- Descriptive overview of business model.
- Supplier agreement contract if you are reselling a product.
- New businesses can expect to be asked for a business plan including 6 months sales projections and marketing plan.
- New businesses can also expect to be asked for 3 – 6 months personal bank statements.
What High Risk Industries does the Merchant Doctor work with?
- Airplane charters or Airlines
- Sexual oriented or pornographic merchants: (i.e. escort services, adult chat, adult bookstores, dating services, online adult membership or matchmaker services, adult paraphernalia/toys, etc…)
- Business Services with Annual contracts
- Automotive brokers
- Bail Bonds
- Bankruptcy attorneys
- “Business opportunities”
- Calling cards
- Casino, gambling or gaming
- Chat Sites
- Check cashing services
- Cigarette or electronic-cigarette sales or nicotine cartridges or Vaporizer
- Coins, collectible currency or autographed collectibles
- Collection agencies
- Coupons or rewards-points sales
- Credit and/or debt repair
- Credit counseling
- Credit protection
- Debt collection
- Direct selling
- Discount health or Dental programs
- Debt consolidation
- Drug paraphernalia
- E-Books (copyrighted material)
- Event ticket brokers (unlicensed)
- International Exporting services
- Fantasy sports websites
- Federal Firearms License (FFL) dealers
- Finance brokering, consulting, or loan modification services
- FOREX Brokers
- Indirect financial consulting
- Financial planning, strategy or advising
- “Get rich quick” – books, programs, etc…
- High average tickets
- “How-To” type websites
- Horoscopes, astrology or psychic services
- Hypnotists or self-hypnosis
- International merchants
- International shipping, cargo or import/export
- Investment firms, strategy, and books
- Lawyer referral services
- Life coaching
- Lingerie sales
- Magazine sales and subscriptions
- Mail order
- Membership organizations
- Merchants on the terminated merchant file – TMF merchants
- Modeling agencies
- Multi-level marketing (MLM)
- Music, movie, software downloads or uploads
- Non US citizens with Domestic businesses
- Offshore corporation establishment services
- Pawn shops
- Payday Loans
- Poor credit
- Prepaid debit cards
- Inbound or outbound telemarketing services
- Replica handbags, watches, wallets, sunglasses etc…
- Self defense, pepper spray, mace, etc.
- SEO services
- Sports forecasting or odds making/betting
- Talent agencies
- Telephone companies
- Telephone order
- Third-party processing, factoring merchants
- Timeshares or timeshare advertising
- Tour operators
- Travel services
- Travel agencies
- Travel clubs
- Vacation planners
- Vacation rentals (unless property is owned by merchant)
- Vitamin and supplement sales – Nutraceuticals
- VOIP services
- Extended warranty companies
- Weapons of any kind – guns, knives, stun guns, or ammo
Just CONTACT US and we will get back to you in no time with the absolute best solution for your business!
- High volume load balancing and multiple MIDs
- Domestic and International High Risk solutions
- Chargeback prevention and protection programs available
- Comprehensive suite of secure gateway payment processing solutions
- High Risk ACH solutions
Ready to Talk?
Find out if the Merchant Doctor is right for you.