How You Can Get The Best Rates For High-Risk Merchant Services

If your business has been classified as high-risk, it can be hard to get a fair payment processing account.  Many of the normal merchant services providers will not work with high-risk businesses and you are left looking at high-risk merchant service providers.  These providers will generally not offer the best terms because of the risk that your business poses to them.  However, this does not mean that you should simply accept the poor rates that you are going to be offered.  There are a number of ways that you can try to get the best rates from high-risk merchant services. 

Look At Normal Merchant Services

Before you start looking for the best merchant services companies, you need to look at the normal merchant accounts.  This is important because each merchant provider will have different approval guidelines.  This means that one provider may class your business as high-risk, but another will not.  

If you find a normal merchant services provider that you like, you should try applying anyway.  It is possible that they will accept our business if they have more lenient guidelines.  Of course, it is important to note that there are certain types of businesses that are always deemed as high-risk and not normal merchant services provider will open an account for you.  You need to know what these businesses are and determine if you fall into these categories.  

Avoid Accounts With Preset Limits

If you are unable to get an account with a normal merchant services provider, you have to look for certain points when comparing high-risk providers.  The first point is the limits that are set on the account.  To get the best rates, you need to avoid high-risk merchant services that have preset limits on the account.  

The preset limit might seem like a good idea to any new business as you will not have many transactions.  However, as your business grows, your transaction volume will grow and this will be a problem.  Once you start to exceed the limits which have been set, you will be charged a penalty fee and this will quickly increase your rates.  

It is better to look for a merchant account that offers unlimited transaction volume.  This will ensure that the rates you are getting now will still be the best when your company starts to grow.  Future proofing your merchant account rates are important because you do not want to be charged penalties or have to change accounts too often. 

Be Upfront With The Provider

As a high-risk business, there is always the temptation of lying or misrepresenting yourself when you apply for a merchant account.  This is something that you need to avoid at all costs because it will not help you get the best rates.  If you do not fully disclose the services or products that you offer to the provider, they will close your account without notice when they do find out.  In these cases, honesty will be the best policy. 

When you are honest and upfront with the provider about your business, they will know the risks that you pose to them.  This will help them better determine the applicable rates for your business.  In these cases, you will often get the best rates for your type of business because the provider is well informed about everything your business does.  

Provide Your Previous History

If you are not starting a new business and you have previous business history, you should give this to the merchant service provider.  This will help them see that your business has a good track record and that you are not as high-risk as they may think. Doing this can often decrease the rates that you are going to pay because your risk level is lower.  

This is something that you should do even if you have been denied services or dropped in the past.  Your track record is important because it shows the type of business that you have.  History shows that your business is profitable and that you do not have major issues which will put the merchant services provider at higher risks.  

Keep Your Chargeback Ratio Low

If you are already trading, you need to take some steps to manage your chargeback ratio.  If you are a new business, you have to put a system into place for this as it will help you get the best rates in the long-term.  There are a number of steps that you can take to manage your ratio. 

The first step is to have a clear refund policy which stipulates that the customer should contact you first if they are dissatisfied.  When they do this, you will have the chance to talk to them about the problem and potentially find a solution that does not result in a chargeback.  Having a clear refund policy will also help you win when there are invalid disputes where customers contact their credit card provider and not you.  

You should also set up a follow-up system as part of your sales funnel.  After a sale, you should contact the customer to ensure that they are happy with the product or service you provide.  This will help you reduce the number of chargeback requests because you know when there is a problem and can take steps to remedy this.  

Renegotiate The Rates Later

If you have started a new business, it will be very hard to get the best rates when you first apply for a merchant services account.  This is due to the lack of business history and the fact that new businesses are seen as having a higher risk of closing and other teething problems.  This is why you might need to be patient when it comes to getting the best rates and be willing to wait to negotiate them. 

Once you have an account, you should wait for a few months to build up a track record of transactions and business dealings.  Once you have this history, you can contact the merchant services provider and renegotiate your rates based on this.  Most providers will review your history and come back to you with amendments that they are willing to make which could result in you getting the best rates possible. You can visit here for further information.