Numerous factors can categorize a business as high-risk, like governmental oversight, high chargeback rates and perception of the public. Surprisingly, many businesses only discover their high-risk status when they attempt to secure a merchant account for credit cards processing and ACH payments. Traditional banks tend to shy away from high-risk enterprises, resulting in frequent application denials through conventional channels.

So, what’s the path forward for high-risk businesses? Fortunately, there are specialized open banking payment gateway experts like Pay.cc who focus on delivering merchant services tailored to the unique needs of these high-risk entities. Implementing the following suggestions for high-risk merchants can significantly enhance your chances of getting your payment processing application swiftly and efficiently approved.

Demonstrate Financial Stability

Evidencing a track record of financial stability is a potent tool in your quest to secure approval for a high-risk merchant account. Ensuring that your financial statements and business banking records are not only organized but also current and readily available for your payment processor is essential. One must recognize the significance of displaying sustained and positive growth for your high-risk business. This data serves as proof that your enterprise can effectively manage potential financial crises should they arise.

Embrace Transparency in Your Payment Partnership

It is crucial to maintain complete transparency when dealing with your merchant account provider. Always reveal the specific products or services your business specializes in. Additionally, if your credit history has its rough patches, don’t hesitate to inform your open banking payment gateway provider. The financial institution responsible for underwriting your merchant application conducts a thorough assessment of both your business and your personal background.

Consider your payment processor as your trusted partner in payment solutions. By openly sharing any challenges or hurdles your business has faced, you empower your merchant provider to tailor your submission in a way that maximizes your chances of securing approval.

A Positive Credit History Makes a Big Difference 

A good credit score is highly valued by banks when assessing merchants. It instills a sense of trust and security in financial institutions. High-risk merchants should prioritize maintaining a positive credit history. Any past issues, such as late payments or bankruptcies, should be addressed before applying for a business account. 

Thorough Documentation

Proper paperwork is often underestimated in the application process for a high payment processing account. However, insufficient or improper documentation can lead to significant delays. Incomplete paperwork can slow down the underwriting process due to the need for additional verification.

Provide Accurate Information 

Supplying precise and honest information is critical for a merchant seeking quick approval of a high-risk merchant account. Accurate data minimizes the time required for verification, speeding up the application process. False claims can lead to prolonged verification and potential rejection of the application.

Daily Transaction Limits Should be Managed Properly

High transaction volumes are common indicators of high-risk businesses. Banks scrutinize such businesses more closely before approving a merchant account due to the potential for payment-related fraud and the added burden on banks’ payment processing systems. Frequent breaches of daily transaction limits can hinder the swift approval of a high-risk merchant account, as banks review the transaction history of such businesses, which takes time.

Steer Clear from Extremely High-Value Transactions

Merchants should exercise caution when conducting single transactions with exceptionally high payment amounts. Banks typically subject such transactions to thorough investigation, resulting in delays. Merchants are also required to provide detailed documentation for these high-value transactions, which further extends the approval process. Thus, avoiding exceptionally large transactions can expedite the proceedings to secure instant approval for a high-risk merchant account.

Present Your Payment Processing Track Record

When establishing your merchant account, you’ll be required to furnish an extensive array of documents, and among these, your most recent payment processing statements play a pivotal role. These statements serve as a critical reference for merchant providers in verifying that your business maintains a well-established and reliable processing history. They scrutinize various key factors such as your monthly transaction volume and average ticket size, comparing these metrics from one month to the next. 

Consistency in these figures is vital, as deviations may raise concerns, as banks may perceive them as indicators of a higher fraud risk. Furthermore, for high-risk merchants, it is of utmost importance to keep your chargebacks within or below the acceptable threshold of 1% per month. This demonstrates your commitment to responsible and trustworthy financial transactions.

Final Thoughts

Adhering to the high-risk merchant guidelines mentioned above significantly increases the likelihood of moving your merchant application from the “declined” stack to the “approved” stack. High-risk businesses are already navigating plenty of challenges, and you shouldn’t let the inability to accept credit card or debit card become a stumbling block on your path to success. High risk credit card processing solution providers like Pay.cc specialize in tailoring custom and inventive payment acceptance solutions specifically designed to cater to the unique needs of high-risk businesses. Their expertise can be ideal for keeping your operations running smoothly and profitably.