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.