So you finally launched that business you’ve always dreamed about. Now that you’re looking for someone to process your credit card payments, you’re finding most institutions are just too squeamish to take you on as a client. They all say the same thing: You’re going to need a high-risk merchant account.
Should you be concerned? Do you need a helmet? What exactly makes a merchant account high risk? In a word: adventure. Really! Ever since their emergence in the middle ages, merchants have lined the halls as some of the bravest, most daring souls throughout history. Whether embarking on treacherous journeys by land or sea, no obstacles were too great for our ancestors in their pursuit of sweet, sweet profits.
Merchants rarely ventured alone, however. Even back then, there existed forms of merchant services. Kings and other nobility often funded expeditions to faraway lands, both for luxury goods and bragging rights. With this capital at their disposal, merchants could hire skilled guides and armed escorts to help ensure the expedition’s success.
Times have changed; high risk no longer carries the same element of mortal danger. But the sense of adventure remains, with the bravest of us still embracing the high seas of today’s business world. If you’re one of these intrepid souls, you’re going to need some help! And not from the feint of heart, either.
Many financial institutions these days don’t have the gumption for true adventure anymore. If you take your ideas to one of them, expect to be turned away. Instead, look for a financial institution that still understands the need for adventure and offers high-risk merchant accounts for businesses just like yours.
You might be wondering, “How can I be sure if I’m high risk or not?” Though many factors play a part in determining your level of risk, the gold standard here is chargebacks. If your business experiences lots of chargebacks, you’re high risk. Coping with this on your own might be enough to sink a business, which is why it’s so crucial to have the appropriate type of merchant account.
In exchange for higher, yet steady and predictable fees, your business is protected against the turbulence caused by delinquent payments, flippant customers, and fraud. Think of it as a sort of insurance for your credit card transactions. The higher fees afford you a much greater latitude of protection than you’d find with a typical merchant account.
Typical is fine if you’re selling some boring blue jeans out of a brick-and-mortar. But if you’re reading this, chances are your business is anything but typical. And with the right partners watching your back, it won’t be too long before your business idea starts to see some of the success and respect it deserves.