Finding a payment processor willing to give you a merchant account at a good rate can be very tough when you have been deemed high risk, but this doesn’t mean it can’t be done. The process of finding merchant services is not as hard as it might seem. There are a number of things you can do to improve your chances before you can apply and work with a company that specializes in high-risk merchants. The tips will go a long way in helping you with the process.
Finding a service specializing in high-risk merchant accounts
When you are in the process of researching some of the best providers, you will notice that those that have been highly rated for providing low rates and quality don’t offer merchant accounts for businesses that are considered high risk. The fact that they don’t provide an account for high-risk businesses is the reason why they are able to provide their services at a low rate. When these providers avoid high-risk business, they are keeping their overhead as low as possible.
Even if such providers were able to provide you with merchant services, there is a good chance that they are going to charge you very high rates and the contracts they give you will be the punishing ones.
Looking for a payment processing specializing in high-risk accounts is a good idea because they will be in a better position to provide you with better options and at a lower cost. They have specialized in this area and they have a good understanding of the nuances of setting up a high-risk merchant account, giving them the ability to set up an account that is tailored for your business and also affordable. There is a wide range of options you can choose.
Always be aware of the costs
Having a high-risk tag on you will mean having to pay a higher price than a regular business, even if you choose to go with a service specializing in high-risk merchant accounts. You can expect to pay between two and five percent for each transaction and also the account fees can drastically vary, depending on the services you are going to need.
It is important to keep in mind that there will be no one offering you the rates you see processors advertising. You should know this so you don’t end up rejecting a great service for your high-risk business just because you think they are charging more than what you have seen somewhere else.
Figuring your processing needs
The basic needs that you will need from a high-risk merchant account from www.thesoutherninstitute.com are similar to any other. Because you are paying a higher rate and fees, you will have to start carefully thinking about the exact services and equipment the business needs so you can minimize the costs. The processing of figuring what you need and what you can do without is a tricky one. There are some services that can seem a little too high, but the increased profits you are going to get from extra sales justify it. Some of the things you need to see whether you need include;
Credit Card Terminal – This is a must for a brick-and-mortar business. There are many people who don’t like to have cash on them and prefer making their payments using a card. You also have to know whether you need an NFC capable terminal able to process contactless payment options like ApplePay.
Mobile Payment Solutions – If you have a business that is always on the go and you need to process the payment anywhere at any time, then this is important for you. If you are in the same place always, there is no need to get this service.
POS System – This is a modern-day standard for business because it will seamlessly integrate the in-store and online management programs, ordering and payment process, and tracking tools.
E-commerce Payment Gateway – You will need this if you plan on selling products online. This service is not necessary if you are not planning on selling online.
Buy equipment instead of leasing
The high cost of equipment can be off-putting when starting a business and this is why many of them will prefer leasing. When it comes to credit card processing equipment, it is important to buy because it will save you a lot in the long run.
Most of the lease agreements out there will lock you into a 48-month contract, and you will be faced with severe fees if you cancel. Even if after a year of use you stop using the hardware, you still have to pay till the end of the contract. There are some that cost $100 per month when the machine would cost three to seven hundred dollars up front. There are some merchant account providers who will give you a credit card terminal for free. There is a little fee you will have to pay for the terminal renewal, but this is usually about $70-$80.
Negotiating pricing based on the needs of your business
Setting up a high-risk merchant account is not a straightforward process and most processors will not give you any fees or rates upfront. It will involve dealing with third-party organization and services before the solutions can be provided.
This means there are some negotiations you can do to get a great deal. Following the tips above will help you know what you really need. The two costs that are a must are account fees and processing rates. Processing rates are those that you pay for each transaction, and the account fees are those you will be paying for on a monthly or yearly basis. A high-risk account will have to pay more for both. Depending on the needs of the business, you can manage to negotiate lower for one or the other.
Getting a month-to-month contract is the best option especially when you are high risk. This is an option that many providers find difficult to agree to because the business is risky. A three-year contract is the alternative, and it comes with a very high early termination fee. These fees can be very devastating if the business goes under. You can choose higher fees for a more flexible contract.