Processing High-Risk Businesses:

Know Your Merchant Account

Written by Rebekah Moss 29 Nov 2019 - 4 minutes reading time

There is an increased difficulty in finding payment solutions and merchant service providers for businesses classed as high-risk by acquiring banks.

Businesses in industries such as CBD Oil, Forex, Cryptocurrency, Gambling and Nutraceuticals will understand the struggle of finding a payment processor.

If you're unsure as to whether your business classifies as high-risk then consider this checklist:

High-Risk Checklist:

A high-risk merchant account is assigned to businesses wanting to accept and process transactions made via debit or credit card.

Your business processes a large number of daily transactions.

Your business processes high-value transactions.

Your credit history is poor.

But first, a business must set up a merchant account. This can be done via a merchant service provider who can negotiate the best rates for you.

What constitutes a High-Risk Merchant Account?

A high-risk merchant account is often classified as an ISO (Independent Sales Organisation) account. An ISO offers merchants the flexibility to handle multi-currency transactions and protect against fraud. An ISO also involves a smaller aggregate merchant account, that can further streamline business operations. An ISO will require the merchant to present an upfront or rolling reserve to protect against fees from customers and fraud such as chargeback. This amounts to either a portion of your revenue over your business operations or an upfront fixed bond, that covers your costs - so the bank isn’t liable for any charges.

MCCs

Merchant Category Codes are assigned to every business with a merchant account to help to acquirers and issuing banks to verify the type of service provided to consumers.

High-risk businesses fall under the following MCCs: 6012, 7995, 7994 and 8999, 5977, 5499, 7273.

What do these codes mean?

6012 Payments collected by financial institutions.

7995 Betting or gambling.

7994 Video Game Arcades.

8999 Professional Services.

5977 Cosmetic Stores.

5499 Food speciality stores.

7273 Dating and Escort Services - including online services.

When a customer is making a transaction through the point of sale with a high-risk merchant, their issuing bank will often require additional information that verifies the customer’s explicit consent in making the transaction. This is to the benefit of the merchant in preventing fraud and chargeback claims. Payment gateways may find it difficult to process merchant accounts that are considered high-risk due to the security authentication and fraud screening parameters set in place to verify the customer’s consent. This is especially prevalent in cases of the 6012 MCC due to the new legislation surrounding it.

Total Processing can provide your high-risk merchant account with a payment gateway equipped with solutions to protect against chargebacks and credit card fraud.

Our gateway is enhanced with a level of control and advanced security fitted with hotlists that allow you to blacklist fraudulent and ingenuine customers based on their email address, IP address, country of origin, home address or device. With our reporting analytics and card authorisation protocols, your business will be protected at the best rates possible. If your business meets this high-risk checklist, you may be subject to higher rates. Total Processing can onboard this process for you, as well as negotiate the best rate throughout our partnerships with many acquiring banks.

This Includes:

Fixed Bond Negotiation Rolling Reserves Deferred Payments

Merchants often experience difficulty getting established and maintaining accounts within particular industries that are considered high-risk.

Our ability to negotiate our long-established relationships with multiple acquirers allows us to obtain competitive and multiple rates tailored to your business.

Experience advanced security with our expert merchant accounts and payment solutions.

Make sure to read our in-depth white paper to access full coverage on MCCs and high-risk merchant accounts. Check it out here!

Sources:

www.totalprocessing.com www.visa.co.uk www.web-payment-software.com www.centus.com www.payprin.com

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