Higher risk and hard-to-place merchants represent a significant profit opportunity, particularly those that have a high volume of complex transactions. To benefit as a high-risk retailer, you need to have the right processing partner. Specialists in the high-risk payment processing space that form the right bank relationships will have a huge impact on your ability to process high-risk transactions. As a reseller, there's a good chance you turn away profitable business due to concerns about risk or chargebacks. While not all businesses that are considered high-risk are built the same, each have their own unique requirements. It is important to note is that many industries considered high-risk are also some of the most profitable. Such industries include gaming, adult entertainment, dating services, financial services, legal services, travel and hospitality, and many more.
What Makes a Merchant High-Risk?
There are several pieces of criteria that can qualify a merchant as high-risk, including:
- Accepting recurring payments
- Offering subscription-based products/services
- Having cyclical sales
- Lacking an established payment processing history
- Conducting transactions in multiple currencies or multiple countries (especially those that are traditionally known for having high levels of fraud)
- Being in an industry that is known for having a high chargeback ratios
How Does Fraud Take Place?
There are a number of ways that high-risk merchants experience credit card fraud. Some of the most common ways include:There are a number of ways that high-risk merchants experience credit card fraud. Some of the most common ways include:
- Identity theft
- Increased chargebacks
- Account takeover
- Stolen passwords
High-risk merchants frequently experience fraud in a variety of different ways. For example, merchants with expensive inventories often attract hackers, scammers, and fraudsters who know how to do significant financial damage in only a single transaction.
When it comes to finding the right credit card processor, you must find a suitable, compatible program. How programs are set up can vary, but there are several main points to consider and discuss with your processing partner.
- Buy rate: This applies to your cost. The lower they are, the easier it is to be competitive and the more you can make on your merchant's sales. For example, if your buy rate is 2.00% + 20¢. per transaction, you could resell/mark it up to 2.25% = 25¢.
- Processing statements: You should make money off of your merchant's processing statements. A buy rate of $5 a month is the highest you should accept. Most merchant statements run the merchant $10 per month so if you get a buy rate of $5 and charge your merchant $10 for the statement, that's an easy $5 a month guaranteed.
- Monthly minimum: This is a fee that is charged if a merchant does not process enough volume during a month. You want the freedom to be able to charge whatever minimum you want, or not have one and be competitive
- Setup fees: You shouldn't be charged setup fees when you bring in a new account
- Equipment/gateways: If you resell a processing partner who has a proprietary gateway, you can increase your revenue.
Partnering with BankCard Services
Profit from high-risk industries and grow your business by partnering with BankCard Services. With BankCard as your processing partner, you'll gain an array of benefits, including maximum revenue share and residuals, comprehensive training, marketing materials, reporting/analytics, and more. You'll also enjoy transparent interchange plus or zero-fee pricing, top-tier technology, chargeback management, and risk reduction programs. On top of all that, you’ll be able to process recurring subscription billing and international merchant accounts with the help of an automated account updater.
One of the biggest advantages of using BankCard as your processing partner is our payment gateway's built-in fraud protection that easily integrates with your existing software. BankCard understands high-risk merchants, and our team of specialists has extensive experience to address high-risk industries. BankCard provides its reseller partners with industry consultation and flexible merchant account solutions—domestic or offshore—which can reduce liability to yield greater rewards. In short: you can now turn previously declined deals into profit. Start earning additional revenue by becoming a partner with BankCard.
Mickael is an entrepreneur and the Co-founder of Bankcard Services. He is a family man and loves technology, innovation, and soccer.