Tips on Choosing the Right High-Risk Merchant Service Provider
No entrepreneur likes it when their start-up business gets categorized as high-risk business. So, it’s natural if you felt a little disheartened after being turned down by many payment processors. But, believe us you are not the only person to go through this situation. You must understand that the categorization of high-risk business is not the end of your business.
Understanding High-Risk Merchant Account
Thanks to the high-risk merchant service providers that there are many high-risk business owners who are running their business smoothly. But, unfortunately, there are some predatory merchant service providers who are in the market only to take advantage of the plight of high-risked businesses.
It is important for you to choose the right service provider to get your High-Risk Merchant Account approved if your business has been classified as a high-risk business. According to Steve Johnson from High Risk Merchant Account LLC, a month of extreme growth in transactions can cause a credit card merchant provider to terminate your account.” In this article, we are discussing some points you need to take care while choosing the right option for you.
Fee for the services – When you contact a reputed service provider they will help you with all the services related to the low-risk merchant account holders. These services include access to payment gateways, purchasing cards, and physical terminals. You must know that all these services come at higher rates as compared to general merchant accounts. But don’t let the notion of the higher fee be an excuse to literally loot you. Compare the fee charged by different high-risk merchant service providers.
Holdback or rolling reserve – Don’t get freaked if a high-risk merchant service provider asks you to pay an amount as a rolling reserve or a holdback. This is customary for the high-risk business service provider to keep aside certain funds as a guarantee against fraud, non-payments or closure of the business. But this holdback percentage varies from provider to provider and the period of withholding is also negotiable. So, make sure you choose the one that is not withholding a very large sum for a very long period.
The reputation of the service provider – In addition to the fee, holdback and discount prices, you should pay attention to the service provider’s reputation. You can know a lot about the provider by visiting their website and checking online reviews. Before extending your hand for any relation, be sure to check the reputation of the service provider. If you get any incident of fraud listed against the service provider you like, think twice before moving forward in the deal.
The flexibility of the contract – Once you sign a contract you’ll get bound by anything written on it. So, don’t be desperate to sign a contract with any high-risk merchant service provider. You should read through the entire contract with or you may get ripped-off by the service providing company. The terms and conditions of the high-risk merchant service contract are much more complex than the general merchant service contract. And, there’s no standardization in the sector. So, it is imperative for you to be extra vigilant.
Once you get the right high-risk merchant service provider, you can run your business without tension or frustration of being classified as a high-risk business. So, choose the one who can work together with you to make your business endeavor a success.