Payment processing companies charge different fees for different kinds of transactions. Qualifying transactions are charged lower fees because there is a reduced risk of fraud, chargebacks, and invalid card use. For high risk transactions the fees are increased. Transactions are separated into 6 qualifying levels. There are some high-risk merchants that have higher fees to start with.
HIGH RISK BUSINESSES AND TRANSACTIONS
Internet transactions are considered a high risk because the card is not present. The same is true of transactions that are done over the phone. There are businesses that are considered high risk also. High-risk merchants include merchants that sell products and services that people may become addicted to or be willing to use fraudulent means like the following types of businesses:
- Adult services and merchandise
- Online gambling, casinos, and sports betting
- Tobacco, cigarettes, and cigars
- Travel agents
- Dating services
These merchants know they are in high risk, but choose the field because of the potential profit. They know they need a payment processing company to do the business that they want to.
HIGH RISK PAYMENT PROCESSING
A payment processing company that accepts high-risk merchants will need to provide the merchant with the following services.
- Fees that are reasonable (will be higher than lower risk merchants)
- Prompt acceptance and set up of account
- Ability to process high volume sales
- Varied options for payment
- Secure, verified payment options
There are a limited number of payment processors that will accept high-risk merchants, but they are out there and a high-risk merchant should shop around for the best services and the lowest fees.
THIRD PARTY PAYMENT PROCESSOR
Some high-risk merchants choose to hire a third party processor that handles high-risk payment processing when the merchant is unable to get a merchant account. There are fraudulent third party payment processors, so is important to hire a reputable processing company.
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