Reduce Reserve Rates for High Risk Merchant Accounts

What to Know to Get the Best Rates

Your business has been labeled high risk. You need to open a merchant account to grow your business, but you don’t know if you can afford the high reserve rates. You understand the necessity of having reserves for your specific type of account, but are curious if there is a way to help reduce the rate you will have to pay. The short answer is, yes, there are ways to help lower reserve rates. Check out these top ways to lower required reserve rates for your high-risk merchant account.

Manage Chargebacks

The best way to lower reserve rates is to reduce the number of chargebacks you process on a monthly basis. Chargeback management and monitoring are offered through most merchant account providers, but not all are equal. Some will simply monitor your monthly sales to see what percentage of sales resulted in chargebacks, while others will actually notify you immediately of any issue. With less monthly chargebacks, the amount of your reserve rates may drop, depending on your account provider. Also, you may be able to negotiate the initial reserve rate. Do you have very low chargeback rates? Can you prove it? Being upfront and honest with your provider will help, whether upon opening your account or renegotiating terms down the line.

Change Your Billing Cycle

For some businesses, they bill their clients or customers on an annual or quarterly basis. This provides the opportunity for more potential chargebacks, as the customer or client may forget they signed up for a specific product or service subscription. By changing the billing cycle to a monthly payment, the chances of chargebacks are significantly reduced. Monthly charges are more common, easily remembered, and offer more security and cash flow for the business offering the services or products.

Own Your Products

Online retailers and resellers have the potential to be labeled high risk, as they don’t always sell their own products. They may outsource products and services at a reduced rate, which enables a cheaper purchase point for the customer. However, the quality of the product and brand reputation may come into question if the number of chargebacks increases. If a company or business sells their own products or services, this can help lower risk and potentially reduce required reserve rates.

Reduce Reserve Rates with Total-Apps

With decades of experience in merchant services and advanced payment processing solutions, Total-Apps is uniquely qualified to help with your high-risk merchant account. Based on the team’s expertise, Total-Apps has developed a process to help companies manage payment processing and reduce risk and associated costs. By implementing specific payment processing solutions, Total-Apps can reduce the risk for your business and lower reserve rates.

Contact Total-Apps today to see how you can lower your reserve rates!