Health and Beauty Merchant Account

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High risk merchant account
Emily Wallace
CEO
Health and Beauty Merchant Account
The health and beauty industry is a multi-billion dollar business juggernaut. It contains an array of business categories, including salons, haircare, skincare, and much, much more. The beauty business now sells an almost mind-boggling array of creams, supplements, and more. As the beauty business has expanded, so have the options that consumers have at their disposal when it comes to where they can make a purchase. If you are involved in this business type, you fully understand just how competitive it is—but also how rewarding it can be.
 
However, like all businesses, the health and beauty industry has some challenges that are unique to its interests. One such example is finding a credit card payment processor that can handle the needs of individuals within this business space. For a variety of reasons, it can be difficult to open health and beauty merchant accounts, and other card processing solutions are often hard to come by. This means that processing credit cards or online payments can be difficult, more expensive, or outright impossible. In a health and beauty business model, this is not acceptable. Virtually no business is cash only these days, and this industry is no exception.
 
Merchant processing is necessary for the health and beauty business. This means that you may have to explore alternative options. Opening a high-risk payment gateway is something that a high-risk business may need to do.
 
Despite these obstacles, owners of beauty businesses can still set up health and beauty merchant accounts. You’ll have to look for a specialized payment processor. This likely means that you’ll have to find someone who has explicitly worked with high-risk payment accounts. Bankcard has years of experience working with these types of accounts and will be able to fulfill any payment processing and credit card processing needs you may have. As industry leaders in the payment processing solutions world, you can expect to be able to rely on Bankcard to solve your high-risk payment processing needs, provide you with POS equipment, and ensure that you will be accepting payments from customers that want to do business with you.
 

What Does the High-Risk Classification Mean?

It means more money, time, and hassle for your business.
 
A high-risk classification means that a merchant account provider believes your business has a higher-than-average risk of fraud or chargebacks occurring. Chargebacks are when a card on a chargeback is reversed. This may happen for a variety of reasons. A chargeback means lost revenue for you, but it also means additional costs to your credit card provider. 
  
The burdens that come with a high-risk classification include:
 
  • Processing Fees: Every time a credit card is charged, there is a processing fee that must be paid by the merchant in question. A high-risk account will have to pay a higher processing fee. This is done to offset the risk to the credit card processor.
  • Chargeback Fees: Chargeback fees are normal for any line of business. They are higher for high-risk accounts. 
  • Additional Records: You’ll need to supply a payment processor with a variety of records, regardless of if you are low risk or high risk. You’ll likely have to supply additional records if you are high-risk. This includes credit history, bank statements, past payment processing history, and more.
  • Higher Reserves: A payment processor will deposit any money you are entitled to into your bank account. They may keep a small percentage of that money as a cash reserve to protect against any loss incurred by chargebacks. High-risk accounts will have higher cash reserves.
  • Volume caps: Volume caps are normal in the processing industry. They are viewed as protection against the risk that comes with credit card processing. You may face volume caps. These caps can occur in the total amount of transactions, or the total cost of the transactions. 

What Businesses May Need Health and Beauty Merchant Accounts?

Many businesses could use this type of account. It includes:
 
  • Salons or hair care operations
  • Nutrition stores, including stores that sell supplements and related products
  • Tanning salons
  • CBD vendors
  • Nutraceuticals
  • Skincare products
  • Freelance hair or makeup artists
  • Nail salon
  • Esthetician
  • Selling makeup as part of an MLM operation, such as with Mary Kay or Avon

Why Are Health and Beauty Merchant Accounts Considered High Risk?

It’s important to understand why health and beauty merchant accounts are considered high risk. If you have a good understanding of why this is the case, you may be able to alter your business practices to reduce the risk associated with your health and beauty merchant accounts.
 
  • High chargebacks: Beauty products tend to have high chargebacks. There are many reasons for this, but it’s typically associated with high claims and the inability of many products to meet such claims.
  • Reputational issues: Beauty products have a bad tendency of making grandiose claims and then being unable to deliver on these claims. Furthermore, some health and beauty products claim to be able to do certain things—like remove pain or help people lose weight—and then not meet those promises. This results in dissatisfied customers, and this results in chargebacks. 
  • Subscription-based problems: Many health and beauty products operate on a subscription-based model. This model tends to be associated with high-risk products, as people will often seek refunds for subscriptions that they either don’t remember seeking or no longer want. 

Does This Apply to All Facets of the Beauty Industry?


Yes. 
 
The issues noted above impact many different subsections of the health and beauty industry. You may practice haircare, skincare, tanning, salons, or more. This category also includes businesses that have less reputable reputations, including those that sell nutraceuticals or CBD.
 
Ultimately, this is irrelevant: A payment processor is still likely to classify you as a high-risk business if you sell products in this category. 
 
This is also the case if you have a brick-and-mortar store or if you manage online stores. In many cases, having an online store can increase the risk that your business may incur. This is because of the high amount of card-not-present transactions. A card-not-present transaction is what occurs when someone uses their credit card to make a purchase, but the vendor doesn’t physically see the card. This increases the likelihood of fraud, as it’s harder to verify the identity of the card owner. If there is a fraudulent charge, it increases the chances of a chargeback being incurred by the merchant account provider. This will increase your high-risk classification issues, and payment processing companies will eventually classify your business as high risk.
 

What Services Do Health and Beauty Merchant Accounts Need?


These factors increase the pressure on businesses that are seeking to open health and beauty merchant accounts. These businesses will have to look much harder to find the services that they are seeking. They will need to find processors who are experienced in dealing with high-risk merchant accounts and have worked extensively with high-risk industries.

When it comes to payment processing, there is no shortage of needs. Companies like Bankcard are built to fulfill your various processing options and ensure you have access to the services that will enable you to process payments.

Can your high-risk payment processor handle processing credit cards? Do they have online payment options, and can these options easily be installed into your website to ensure that you can process credit cards or use other payment services? That last item is particularly important, as traditional credit cards are being used less and less in payments. More people are shifting to a variety of other highly flexible payment options. This includes services like Stripe, Venmo, PayPal, and more. Even if you only have a brick-and-mortar store, you should make sure that you find payment options that can handle this growing area of payment processing.

If you have a brick-and-mortar store, you’ll need a high-risk merchant processor who has worked in retail locations. This means that you’ll need a processor who can help you with a low-cost or no-cost set-up and be on-call whenever you are open. This is vital: Your business can’t stop if a piece of equipment breaks, and you must have access to payment processing tools and 24/7 customer service.
 
You should also fully understand the costs of processing, and if your merchant account provider offers items such as high-risk protection. Some merchants, like Bankcard, offer zero-cost processing tools. This allows the costs of processing to be passed along to customers and folded into your total price. This can be successful for some merchants and many have found it to be a viable method of covering costs associated with credit card processing.
 
You also have to keep an eye on the future. At the moment, credit card and online payment processing tools are what your business will most likely need when it comes to collecting payments from your customers. The future may change this, and the rise of cryptocurrency means that your business may need to consider adding these payments in the future. Most health and beauty businesses do not actively need this payment processing method—yet—but may in the future. You should make sure that your payment processor has an eye on future payment collection methods and will be able to serve you should the need arise. 

There are also payment options that extend beyond credit cards, online payment methods, or crypto. ACH payment has become a fast and reliable way of allowing customers to make payments directly from their bank. Your business may need to consider the addition of ACH payment options to appeal to a segment of customers that prefers making payments in this manner. 
 

What Other Services Does My Health and Beauty Business Need?


The above services are the basics that any high-risk payment processor should be looking for. However, you’re going to need more than that to survive in a highly competitive business world.
 
Among the more important services your business may need are options for integration. This integration means many things:
 
  • Website: Any payment processor must easily integrate with your website. This means that setting up a payment processor may be as easy as copy and pasting a line of code onto your website. Some websites or apps may need customer-created software or applications. If this is the case, your payment processor must have the expertise on staff that allows you to manage these options. 
  • Accounting software: Your payment processor must easily integrate with whatever account and tax software you have. This is necessary to reduce your workload and make sure that you are easily and accurately able to pay any taxes owed.
  • Already existing gateways: Your business may have already set up a variety of payment accounts on numerous services. If this is the case, a payment processor should be able to easily integrate with your already existing accounts. 
Finally, it’s worth considering how a payment processor can help you market. A payment processor should be able to provide you with contact information on your customers, including addresses, phone numbers, and Email addresses. This should allow you to expand your potential marketing options and give customers a chance to learn more about your business. 
 
At the end of the day, you’ll need to ensure that you find a merchant account provider with experience in the area of health and beauty merchant accounts. Bankcard has ample experience in working with a slew of high-risk merchant accounts, including health and beauty merchant account providers. If you are interested in learning more about Bankcard and the services they may be able to offer you, contact us today.

Integrations

Bankcard Connect plays nice with others

Bankcard Connect integrates seamlessly with ISV software to simplify payment processing for merchants: any payment type, on any device, anywhere. 

Bankcard integrates with over 99% of the tools you are already using, including popular accounting software and e-commerce apps, regardless of your industry. Our payment services were designed to be adaptable to provide seamless integrations for our customers.

merchant account integrations c

BigCommerce
Formsite
Infusionsoft
Keap
Magento
Microsoft Dynamics
Network Solutions
SalesForce
Shopify
Volusion
Web.com
Weebly
WIX
WooCommerce
WordPress
Yola

Cart66
Checkfront
EASYCART
eShop
Event Espresso
events manager
GetShopped.org
GRAVITY
Jigoshop
Paid Memberships Pro
Shopp
SHOPPERPRESS
templatic
TheCartPress
WishList MEMBER
WooCommerce
WORDPRESS eSTORE
WP GATEWAYS
WpInvoice
wpmudev

Drupal Commerce
Ubercart

HikaShop
Miwisoft
VirtueMart

911 Software, Inc.
ACR Systems
Activant
Aldelo Systems, Inc.
Applied Micro Technology
Advanced Retail Management Solutions (ARMs)
Auto star
Cantaloupe Systems
Data Business Systems
Datacap Systems, Inc.
DataTech Corp
DataVantage
Edgil Associates
Elavon*
Epicor (CRS, NSB)
Freedom Pay
Gateway Ticketing Systems
Idalica Corp
IJN Systems
IT Retail
KWI
Main Street Softworks
MBS Textbook Exchange
Medasyst, Inc.
Microsoft
/n Software, Inc.
PC America
POSiFlex
RATEX Business Solutions
Retail Data Systems
RTL Payment Systems
ScanSource, Inc.
Sicom Systems, Inc.
Slim CD
Tempus Technologies
Tender Retail Systems
The Software Mills
Tomax Corporation
Total Computing Solutions
TouchNet Information Systems
XProtean, Inc. (C-Payment Software)
XPient Solutions
Vista Entertainment Systems

911 Software, Inc.
Data Business Systems
Dinerware
Datacap Systems, Inc.
Main Street Softworks
Menusoft Systems Corp.
Micros Systems
Midnite Express, Inc.
/n Software Inc.
NCR
onePOS.com
Ordyx
Radiant Systems
Revel Systems
Sicom Systems, Inc.
Squirrel Systems
Tempus Technologies
XPient Solutions
XProtean, Inc. (C-Payment Software)
Elavon (previously Southern DataComm and Global Card Services)

Dresser Wayne
Excentus
Fuel Links
Fiscal Systems, Inc.
Gilbarco
LOC Software
Main Street Softworks
Petro RX
PetroVend
Radiant Systems
Retalix
VeriFone Ruby System

Datacap Systems
JPMA
LOC Software
Logivision
MTX/EPS
RORC
StoreNext
Torex

911 Software, Inc.
Hotel Software Systems
Slim CD
Elavon
Tempus Technologies

Government organizations face a growing need for secure payment processing services while managing highly specific needs for content management and security. 

We can work with popular technology products government agencies prefer, like Ciber and Cubic, to create an integrated solution that meets all your needs for processing payments, managing information, and more.

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We partnered with Bankcard in 2017 and they've been there for us every time. Everything is super fast and I love how well they communicate with our staff. They really know their stuff, and we work in a very complex industry! My account executive knows our business inside and out.

Alexandria, CMO
High risk merchant account payment gateway

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FAQs: Table of Contents

Accepted Industries and Countries​

The industries we accept for high risk merchant accounts include, but are not limited to the below industries.

  • Adult merchant account
  • Bad credit
  • CBD
  • Credit Repair
  • MLM
  • Nutraceuticals
  • Payday loans
  • Private airlines
  • Subscriptions
  • Travel
  • Vape & eCig
  • Illegal business activity
  • Businesses without the proper license
  • Illegal drugs (CBD with less than 0.30% THC is acceptable)

Bankcard can provide merchant accounts to customers in the below countries. Kindly note that many payment solutions are regulated based on location.

  • Andorra
  • Austria
  • Bear Island 
  • Belgium
  • Bulgaria
  • Canada
  • Channel Island
  • Croatia
  • Cyprus
  • Czech Republic
  • Denmark
  • Estonia
  • Faroe Islands
  • Finland
  • France
  • Gibraltar
  • Greece
  • Greenland
  • Hungry
  • Iceland
  • Ireland
  • Isle of Man
  • Israel
  • Italy
  • Latvia
  • Liechtenstein
  • Lithuania
  • Luxembourg
  • Malta
  • Monaco
  • Germany
  • Netherlands
  • Norway
  • Portugal
  • Romania
  • San Marino
  • Slovakia
  • Slovenia
  • Spain
  • Sweden
  • Switzerland
  • Turkey
  • United Kingdom
  • United States
  • Vatican City

Being a start-up business will not hinder a business from getting approved for a merchant account. While having a processing history helps your likelihood of getting approved,  the lack of processing will not necessarily stop you from getting an approval. Consult an experienced Account Executive today to learn more. 

There are never guarantees when it comes to the approval of a merchant account. However, we do work with merchants that have low credit scores. Reach out to an Account Executive today for a consultation. 

If you’re a United States citizen applying for a merchant account for a United States registered business, a social security number is required. 

A merchant account can be labeled high risk for many reasons. You can be labeled as such due to high average tickets, being in an industry that historically has high chargebacks, or an industry that tier one banks do not support.

Applying for a merchant account

To apply for a high-risk merchant account, you need to complete our pre-qualification form and upload all required documentation. Once the pre-qualification is complete your Account Executive will locate the best placement for your account, and send you a final agreement. Once that final agreement is signed, underwriting will complete a full package review for approval. 

There is no fee to apply for a merchant services account with Bankcard. However, If you get approved with us there may be a small setup fee for your gateway account.

Square, Stripe, and Paypal are all payment facilitators and do not accept high-risk merchant accounts. Signing up with Bankcard gives you a direct merchant relationship with a sponsor bank. The approval process requires more documentation, but you’re at a significantly lower risk of getting terminated.

This depends upon how quickly you, the merchant, completes our pre-qualification form. Once we have all of your documentation, we get to work. We can typically locate placement for your merchant services account in 48 hours.  

Once you get an approval, you’ll be able to accept credit card payments within 24 business hours. 

Depending upon the program, you will receive your funds anywhere from 24 to 72 hours after the batch is settled. 

The industry type is a major determining factor when it comes to risk levels of merchant services. But, other factors such as credit, card-present vs not present, and chargeback ratios can also push an account into the high-risk category as well. 

Completing the Application

Your legal business name should match the business name on the state business registration or licensure. However, if you are a sole proprietor, your name would be the legal business name. 

If you’re not sure how much processing you’ll do, we recommend applying for $5,000 to $10,000 monthly. You don’t need to hit that number each month, but if you’re close to going over, reach out to your Account Executive for assistance. 

Your average transaction amount should be the average of all transactions you would accept with your merchant account. Your maximum transaction should be the anticipated maximum amount accepted in one transaction. If you attempt to process a transaction that is higher than the maximum amount provided, additional proof of purchase may be requested. 

You may provide personal bank statements in lieu of bank statements if your business bank account is new or does not have any activity. 

If you’re applying for a merchant account for ecommerce processing you will need a fully functional website with products or services listed with associated pricing. 

Yes, a credit check is required in order to obtain a high-risk merchant account. Once a final agreement is signed, a hard credit pull is done.  Credit scores are taken into consideration when underwriting reviews a full application for merchant services. 

If you’re a United States citizen applying for a merchant account for a business registered in the United States, your social security number will be required to apply. 

Documents

The first step to applying for a high-risk merchant account is completing the pre-qualification form. Three months bank statements, three months processing statements (if applicable), a voided check or bank letter, and driver’s license or passport will be required to apply. 

If your business does not utilize checks, we can accept a bank letter that includes your full account and routing number as well as the business or account holder’s name. The letter should be on bank letterhead, be dated within the last 30 days, and be signed by a bank representative. 

If you don’t have three months of business bank statements, don’t fret. We can accept three months’ personal bank statements from a business owner, or director. 

Bank statements show a lot about a prospective merchant, namely, processing activity, and the average monthly ending balance. If a merchant is currently processing, we want to know why they’re switching, if we know a merchant’s pain points we can find better solutions for their needs. The average monthly ending balance is also relevant to show financial stability within the business as well as validating the monthly volume requested.

If a merchant is currently processing credit card payments and successfully managing a merchant account this can increase the likelihood of getting approved. Some payment facilitators such as Paypal, Stripe, and Square might not supply monthly processing statements. Underwriting may request login credentials so they can get an overview of the processing activities. 

Equipment and Gateways

For in-person retail card acceptance, Bankcard can provide equipment that will arrive programmed and ready to accept payments. Discuss your equipment options with your experienced Account Executive.

Here at Bankcard, we do offer our own gateway solution that’s exclusive to merchants that sign up with us. Of course, if there’s a gateway you prefer we are willing to work with you as long as integration is possible. Please reach out to your dedicated Account Executive for details. 

Bankcard integrates with NMI, Authorize.net, and more. For specific gateway integration questions reach out to an experienced Account Executive. 

Your merchant account will be set up to accept Mastercard, Visa, American Express, Discover, and ATM cards. 

Load balancing is the strategy of spreading transactions over more than one MID. It’s not necessary for all high-risk accounts, but can be considered as a way to manage chargeback ratios with high-risk merchants. 

Existing Merchant Accounts

Not to worry, this number can be increased as needed. However, the bank underwriting your merchant account needs to be aware of the expected monthly volume to ensure they have capacity available for all merchants processing with that bank. 

If you go over by a small amount you might be asked for a copy of the invoice or receipt. However, if you go over the monthly limit by a large amount there is a chance your excess funds might be held temporarily. 

When it comes to high-risk accounts, banks ideally want chargeback ratios below the 3% threshold. If you can provide long term processing history the bank may take this into consideration. Lower chargeback ratios are ideal. Consult your knowledgeable Account Executive for assistance in lowering your chargeback ratio. 

Rolling reserves are a way to financially protect the processing bank from potential losses from chargebacks or refunds. Not all high-risk merchant accounts require a rolling reserve. The risk department will determine if and when a rolling reserve is required. 

Interchange fees refer to the issuing credit card brand fees such as Mastercard, Visa, Discover, and American express. These fees vary depending on the card type, American Express tends to be the most expensive card to process. Interchange rates can range from 1% to 2.5%. 

Of course! Once you’ve established a healthy processing history, you may reach out to your Account Executive for a rate review. We recommend only doing this if your processing history shows low chargeback ratios and relatively low refund activity. 

You may request an increase in your monthly volume at any time. However, it’s recommended to wait until your merchant account reflects healthy processing history as well as financial stability from your bank statements. 

Reach out to our support team, or your dedicated Account Executive for any account-related updates you may need. 

Depending on the program your merchant account fees are either taken at the beginning of each month. Some programs require daily discounts. Program details will be notated on your final agreement and if you have further questions you can always consult your Account Executive. 

ACH payments

Bankcard can assist with ACH or eCheck services. An application and approval process still applies to this service, or it can be an added service with your processing account. Reach out to your Account Executive for details. 

The approval process requires less documentation than applying for a merchant services account. And if you’re already processing with Bankcard an approval can be expedited. 

Every account is different, however, most programs allow next-day settlements for ACH transactions. 

ACH payment acceptance can be integrated into most website platforms. Reach out to a dedicated Account Executive for more information. 

Pricing and Approval

High-risk merchant accounts are priced higher than low-risk accounts because fewer banks are willing to work with businesses labeled “high risk”. Banks also need additional financial protections from loss on these accounts.  

Bankcard will always provide fair pricing based on the risk level of every merchant. And if a current processing statement is provided we’ll do everything in our power to beat the merchant’s current rates. 

While we love working with merchants that are considered high risk. There are limitations put in place by bank and card brand rules. If a merchant does not abide by the specific program rules described by the Account Executive assisting them we cannot ensure an approval.

Think of merchant accounts as a loan or a line of credit. And processing banks take on the risk of transactions getting charged back. Banks can end up liable for the actions of merchants, a problematic merchant can damage the reputation of the bank funding and processing the transactions.