Running a business in the adult entertainment, online gambling, travel services, or credit repair industries has its advantages. But it comes with some downsides. Payment processing is one of the largest. These industries are perceived as being high risk by banks and other financial institutions. Hence, securing a merchant account or payment gateway is slightly more difficult.
But you can get a high-risk payment gateway approved. You only need to be prepared well. Here’s a step-by-step guide.
Evaluate your business risk
Before you seek a payment processor, know how risky your business appears to merchants. Your risk level is determined by factors such as:
- Your industry
- Products
- Services that you offer
- History of chargebacks
- Selling to international customers
- Process card-not-present services.
Understanding your risk profile is an important step in selecting the appropriate payment processor. You will know what to expect in the application process in terms of questions and requirements.
Select the right high-risk processor for payments
Not every merchant account provider wants to do business with high-risk companies. Payment services and standard banks tend to refuse applications related to such activities as adult entertainment or gambling.
Find processors who specialize in high-risk merchant account. Ideally, they are supposed to provide:
- Custom solutions
- Risk management tools
- Dedicated support personnel.
Reviews and testimonials can also help you know which providers are good and have the experience to work with your kind of business.
Prepare your documentation
Another step to a good application is a full set of paperwork. Most of the high-risk merchant accounts will require the following:
- Financial statements: Recent bank statements and profit and loss statements to indicate stability.
- Business license: Evidence that shows that your business is registered and legal.
- Chargeback history: Information regarding any past chargebacks to demonstrate that you deal with disputes well.
- Authentication: Authentication of business owners and partners.
With these documents at hand, not only will you be able to do it much faster, but you are also more likely to be approved.
Application submission
Now, you have completed a risk assessment and prepared your documents. The next thing is to complete the application. Ensure that all the details are correct. They should align with your paperwork.
They may ask questions regarding your:
- Volume of sales
- Business operation
- Products or services.
Being open and sincere will reduce delays or rejections.
Revise and negotiate the terms
Upon approval, the processor will offer their terms. High-risk accounts are commonly characterized by:
- Higher processing charges
- Rolling reserves
- Late settlements.
Read through the specifications. You can negotiate for:
- Lower fees
- Smaller reserves
- A quicker probation.
You might get better terms if your business proves to be financially stable and your chargeback rate is low. Do not be afraid to seek some clarification on terms that you do not comprehend. You should be fully aware of what you are committing to.
The last word
Securing a high-risk merchant account or payment gateway does not have to be overwhelming. Just know what to do and prepare adequately. It is a manageable process even for the most risky businesses.