What is a high risk merchant account and how do you open a merchant account?
Has your local bank declined your application, telling you they cannot open a merchant facility because your business model or history presents a risk for them, or that they do not offer services to merchants within your industry?
Luckily Acardpay specializes in high risk merchant accounts. Our risk management experts and decade-long experience working with trustworthy payment institutions allows flexible case by case approach. With our network of tested and trusted international, offshore and domestic banking partners, we are able to provide a merchant account solution for your business no matter if you have been categorized as high risk before or even if your are a startup business.
Who needs a high risk merchant account?
There are many factors which are considered by banks and payment providers when classifying a business as high risk. First in the line is the industry reputation of the business and trading/processing history. For example, online gambling industry is automatically considered as high risk by acquiring banks due to historic connections with unregulated schemes as well as past experiences. When there’s a potential for clients being unsatisfied with the product or service, or when volumes are higher, there is higher chance of disputes or even data theft of credit card details. The providers are at risk and thus impose stricter terms, or decline the merchant account opening.
Chargeback ratios and processing history
Business trading history, what we refer to as a credit card processing history, is the second most important factor. Card schemes, Visa and MasterCard, dictate the acceptable chargeback thresholds, which are between 1-2% from sales volume and transaction count. Many businesses can reach this threshold very fast and even a couple of consequtive months above 2% means the bank will terminate merchant account facility. That’s why most high risk merchants are asked for detailed card processing statements for past 6 months and can only be approved after thorough review. High chargeback ratios, excessive refunds and fraud trends lower the chances of getting approved.
Do I need to open a merchant account if I want to manage online payments (internationally)?
Merchant account is an virtual account set up by third party payment. The merchant account is a concept within the payment processor. It is not an account associated with a channel which is for payment processing. The channel is provided by bank for online merchants who sell products or service over internet to receive order payment from customer. As the transaction is processed from beginning to end over the bank network system, the merchant and customer cannot trade in person, the channel is the way to realize the online transaction.
However general online business owner cannot directly apply for a merchant account which is processing channel with the bank. So that is why third party payment exists, which cooperate with bank and provide payment service for all kinds of merchants. The third party has to have the payment processing licence before even apply for merchant account with the bank. No small business will be able to gain this license and they have to spend this time and cost on this. Third party payment is an easy way for small business to open up anecommerce merchant account for receive payment online. Then the payment processor does everything else for the merchant.
The payment gateway service for domestic merchant and international merchant is different. First of all the language is different, the merchant control panel is different based on the language, and the customer service for them clearly are distinguished from one another. To be continued in next chapter.
Which is the best payment gateway for the UAE?
Acardpay was created as a private processor catering to a single high volume offshore merchant, catering to the specific needs of this merchant during inception and the deep relationship built with our acquiring banks, a simple fee structure approach was developed to help control the bottom line for the client. (With the advantage of world currencies versus the Chinese RMB, more could be done for every dollar earned, helping us reduce costs to the merchant, simplifying without reducing services to the end user.) Today Acardpay has used this model of transparency/simplicity to become one of China’s leading stable processors of debit and credit card transactions for businesses of all sizes and high-risk industries.
Acardpay is your single point of contact for VISA, MasterCard, American Express, Discover, CUP Direct Payment, E-wallet and all On-line Sale solutions. As your one source in an industry of constant change and fluctuating hidden fees, Acardpay is leading the way with Merchant simplicity and transparent fees that merchants can count on. Processing with Acardpay not only improves your satisfaction and ease of transaction processing today, but it will also ensure a superior value proposition for the future, as your business grows and reaches milestones we actively in turn help reduce your costs, alleviate limitations and minimize reporting and tracking required by acquiring Banks.
Our management team has over 5 years of experience in the online credit card processing industry. We are passionate about providing and arranging you with the best solutions, fully customized to your specific business needs, despite your regional limitations, your industry and other compliance issues.
You will immediately notice the qualities which make us apart from other payment providers. Our mindset is all about close business relationship. We achieve this by dedicating our time to your specific case, supporting you from the very first contact, application filling, selecting a bank and obtaining full solution, through integration, MID setup and all the way throughout your entire lifespan of accepting card payments on the arranged solution – everything through our personal dedicated agent support. Your agent is available to you via e-mail and Skype practically 24/7, including weekends.Get in touch and get a free quote
Why is it so difficult for a startup to get a merchant account?
The merchant website has a necessary part which is privacy policy. The website states by whom it represents and what information it collects. The information normally are the customers information when access and register on the website: such as name, contact, order information. As those information are related to confidential, the website must clearly claim what exactly it will do with this information and the how long the information stored. The computer cookie are also the necessary part of the privacy policy. The measures what the website takes to protect the customer information are also included. And third party links, update of the policy, etc. Although different website has different privacy policy, the point is that it has to state what it does comply with the law.
The submitted website for merchant account application in the trading website which will be integrated with the third party payment processor. If the merchant later wants to add new website, if the application being approval, he has to submit request for register new website. Usually it’s a quick procedure for adding new website. As processing channel has a code associated with the industry. Different product with different industry are not supposed to mix in one channel. It is the responsibility which is undertaken by the payment processor.
After the account setup with the payment processor, the first thing for the merchant is to integrate the website with the payment API. API is a document which instructs on how to integrate the website with the parameters of the gateway and how it works. Generally API is very easy to read and use. But if some merchant does not have much technical support or without technician, he can ask for assist from the payment processor. After integration done, the merchant can run a test via the gateway to see if payment goes through before live processing.
What is a internet merchant account?
The payment processing method for them is displayed differently. The tangible merchant integrates payment gateway in their website so customer can pay online. The service website sometimes only introduce some information of their service but does not integrate API for payment. The merchant can process order by virtual terminal through telephone and email order. The virtual terminal is also a payment option from ecommerce merchant account provider. But the criteria for applying VT is stricter as there are more potential risky elements consisted in such payment processing. But if you are an old long time cooperated merchant, it is normally easier for applying VT.
Some payment processors take overseas merchant. The language is different, and the system is based on different kind of software and technical support. There will be more work to be done to take care the cases. The customary program and frequently used words are different. So communication is a key in maintaining the merchant account and their processing. The merchant service department will be taking care all issues with from other areas such as accounting, technical, risk control etc. The service department does not have to directly process the issues, instead they communicate with other departments before answering or notifying the merchants. Therefore the processor obviously not only a technical service provider, it also assists on customer issues, financial report service and settlement service. Also there are many currency exchange rate involved, we will be chatting next time.
What is a high risk merchant account and how do you open a merchant account?
Has your local bank declined your application, telling you they cannot open a merchant facility because your business model or history presents a risk for them, or that they do not offer services to merchants within your industry?
Luckily Acardpay specializes in high risk merchant accounts. Our risk management experts and decade-long experience working with trustworthy payment institutions allows flexible case by case approach. With our network of tested and trusted international, offshore and domestic banking partners, we are able to provide a merchant account solution for your business no matter if you have been categorized as high risk before or even if your are a startup business.
Who needs a high risk merchant account?
There are many factors which are considered by banks and payment providers when classifying a business as high risk. First in the line is the industry reputation of the business and trading/processing history. For example, online gambling industry is automatically considered as high risk by acquiring banks due to historic connections with unregulated schemes as well as past experiences. When there’s a potential for clients being unsatisfied with the product or service, or when volumes are higher, there is higher chance of disputes or even data theft of credit card details. The providers are at risk and thus impose stricter terms, or decline the merchant account opening.
Chargeback ratios and processing history
Business trading history, what we refer to as a credit card processing history, is the second most important factor. Card schemes, Visa and MasterCard, dictate the acceptable chargeback thresholds, which are between 1-2% from sales volume and transaction count. Many businesses can reach this threshold very fast and even a couple of consequtive months above 2% means the bank will terminate merchant account facility. That’s why most high risk merchants are asked for detailed card processing statements for past 6 months and can only be approved after thorough review. High chargeback ratios, excessive refunds and fraud trends lower the chances of getting approved.
What's a good online selling payment gateway?
With so many payment gateway providers out there, it would be difficult to single one out. To speed up your research, I strongly suggest to start with a comprehensive guide like this top 20 payment gateway reference. It gives you a quick look at the top players in the field and their unique offerings.
While it may be easy to transfer to another payment gateway if your initial choice leaves much to be desired, changing services mid-way can be a hassle to you or your customer. It is better that you pick the best service for you at the onset so it can grow with you as you expand you business.
However, there are certain considerations that you have to factor in, such as the following:
Do they have several payment methods like bank transfer, credit cards, or local debit cards?
Do they support international payments with multi-currency and multi-language capability? And do they charge extra fees for these features?
Do they have robust security features and PCI compliance to ensure that online payments and transactions are safe?
Do they provide quality and reliable customer support through various channels? Are these free or come at a cost?
It is wise to scrutinize their websites for their service features as well as terms and conditions so that you are well aware of their policies and offerings. You can also search the internet for user comments and feedback to give you first-hand accounts of their services.
Another thing to consider in choosing the best payment gateway provider is if it can meet your requirement. Certain providers have become preferred choices when it comes to particular needs and situations. Here are examples and my recommendation.
E-commerce – If you operate an online store or sell through Amazon, you can go for Amazon Payments, acardpay. These can handle secure online payments, are noted for fast payment processing and fund transfer, can integrate with most shopping cart and retail platforms, and can provide you a merchant account.
Professional services – For freelancers, independent contractors and professionals who need to receive or send payments fast, you have solid options in acardpay. They provide quick and simple online money transfer, and can receive funds worldwide via credit cards and bank accounts.
SMEs – Startups and small and medium-sized businesses can go for acardpay which has features for recurring billing and multiple payment methods. Acardpay can even do email transaction and offers a free account.
Global Operations – If you have customers, deliveries and billings on an international scale, you need a robust, all-in-one payment platform. Of course, acardpay will come to mind. But there are other equally reliable services such as acardpay which has transaction level reporting and customization options for your business.
