High risk businesses face a myriad of challenges on the global economic platform. Among these challenges is the inability to conduct business fluently and procure gainful profits from it.
What Exactly Makes Your Business High-Risk?
Your business is high risk, not because you are necessarily doing anything illegal, but because the market and regulators have decided as such. You are deemed high-risk if:
- The industry your business is in is considered to be unstable or volatile. A processing agency or the bank will look at online businesses as high risk because of the mistrust that we cannot overlook. When an online transaction is done, there is always the risk that fraudsters could steal information. The bank is well aware of that and uses it to classify your business in that category. There is also the known fact that not all online transactions send well. There is the possibility of being scammed.
- Your company cannot sustain itself-The bank will look at you suspiciously when you have only been around for a period less than a year. They want to look at you from a distance to be sure that you curve a niche for yourself in the market before they can commit to you.
- If your line of work requires customers to make returns for goods at any time, you may be a risk factor for most processing agencies and banks. Cancelling orders and requesting returns on cash are a breeding ground for fraud and hence risky business for otherwise conservative banks.
What to Expect From A High-Risk Merchant Account
- Higher Interest Rates
The interest rates will not be as good as they would be for other accounts. The processing agency will need to factor in the risk that they are assuming when they accept to process your transaction. On the brighter side, you have an agency that is willing to do business with you.
- Proper Treatment
You are in the right place with businesses classified in the same category so that no one will be looking at you judgingly. Processing agencies classify risk differently. What may seem to be risky business to one may be a regular activity to the other.
Businesses classified as high-risk
- Online businesses.
- Online dating sites.
- Airlines and ticketing agencies.
- Casinos and other gambling organizations.
- Calling cards.
If you have been categorized as high risk for reasons beyond you, such as the nature of the industry that you are in, there is nothing that you can do about it. If your reason can be changed such as bad credit or the duration that your business has been in operation, you may soon be able to move from your high risk merchant account to the regular account. Time is all you need.