So you just found out your business is being labeled “high-risk” from banks and merchant account providers. Businesses can be labeled high-risk for a number of reasons. Some of these reasons include: financial risk / loss, health and safety concerns, or government regulations. This makes it a bit more difficult to set up a merchant account for high risk credit card processing….. BUT not impossible. Here’s what you need to know and do to ensure you can start taking credit cards from customers.
1. Consider Opening Multiple MIDs
This is a touchy subject. When you open a merchant account, you’ll be assigned a unique merchant identification number (MID). With some processors like Total APPS, you can open multiple mids on one gateway account. While many processors won’t allow multiple MIDs, Total Apps understand that you may need more than one MID to accommodate high growth or spread your processing among multiple processing banks. You’ll hear from some that opening multiple MIDs can be harmful and you’ll hear the benefits too. It really comes down to the reason you open multiple MIDs. If you are looking to find loopholes in the system, then you’re doing this for the wrong reason. The biggest reason you should consider multiple MIDs is to avoid any disruption to processing. Regulations are constantly changing from provider to provider. What was allowable one day can change the next. By having multiple options, you ensure that you can continue processing without any gaps in taking sales.
2. Look at Chargeback Protection Programs
Any reputable merchant account provider will be able to offer you a chargeback protection program. This program will essentially allow you to view chargebacks and respond and act on them in real time. This is essential when your business is prone to chargebacks. Keeping your chargeback ratio as low as possible is a great start to ensure you keep a positive relationship with your provider.
3. Find a Provider that Practices “Know Your Customer”
If you’re running a high-risk business, the last thing you’ll want to do is sign up for a provider that will view you as just another Merchant ID#. Find a high risk processing provider that will support you with a dedicated account manager. This manager will learn about your business, your pain points, risk, and all this will ensure that your business is given a solution that is customized to fit your business model.