High risk merchants are businesses that do not meet the standard criteria for opening a regular merchant account, such as businesses selling software solutions, digital goods or recurring billing services.
Businesses listed as Mastercard Alert to Control High risk Merchants (MATCH) may still access payment processing through high-risk merchant account providers.
Chargebacks
An organization may be considered high risk if their track record includes frequent chargebacks or returns by customers, where customers dispute purchases with their bank and ask for their money back. Excessive chargeback rates could also indicate potential fraud or other issues within the business; subscription-based products especially seem susceptible due to users forgetting to cancel service or having low credit scores.
Certain industries, like travel or gambling, are notorious for having higher chargeback rates and volatility sales volumes. To mitigate these risks, make sure your payment processor can offer proactive support to help keep your business out of trouble while meeting all your specific payment options and needs. Some providers may even require that you set aside funds in a reserve account in case a chargeback or other financial penalty occurs.
Fraud
Fraud can be a serious threat for all types of businesses. From credit card fraud and identity theft, to account takeovers and account takeovers, criminals have proven they can be extremely creative at perpetrating these schemes. High Risk Merchants can reduce chargebacks by remaining vigilant with customers and communicating clearly; also it’s essential that there be clear terms and conditions both on their website and any documentation sent with products/services as this helps eliminate confusion when receiving bank statement charges.
Being classified as a high risk merchant does not reflect negatively on a merchant or their products and services, rather, it merely refers to their potential for higher chargeback rates which could potentially cause their payments provider to terminate their payments contract with them. Maintaining low chargeback rates within thresholds that trigger sanctions is key in protecting High Risk Merchant Highriskpay.com from potential sanctions by PSPs.
International Transactions
Running a modern business often necessitates accepting credit card payments, and for high risk merchants this means accepting credit card payments through payment processors. Being classified as high risk does not signify moral misconduct or incompetence on your company’s part – rather, it simply indicates some financial risks presented by banks and credit card processing companies.
If your industry or business is more likely to experience chargebacks (travel, nutraceuticals, debt consolidation and life coaching for example) or has had many large-volume transaction disputes for legitimate or illegitimate reasons, your processor or bank could place you on the MATCH list or place you as high-risk status.
However, an experienced payment processor understands the unique challenges presented by such businesses and can guide you through the process with minimal friction. To increase your chances of approval, present your application in such a way as to highlight its best features while sharing documents quickly.
Load Balancing
Operating within industries with high rates of chargebacks poses a substantial risk, yet merchants have several effective tools available to them to mitigate this risk and secure processing services. First off, merchants should carefully study each payment processor website to understand their monthly fees, cash reserve requirements, rolling reserve requirements and application processes before choosing their payment processor.
Second, seek payment processors who specialize in high risk merchant accounts to assist with the approval process, make sure documentation is in order, and present your start-up business in an attractive light. They may even help find an acquiring bank that works well with them. Lastly, you might consider adopting a load balancing strategy by creating multiple merchant accounts (MIDs) to spread transaction volume across entry points – this will reduce your risk profile, minimize total account suspension risk, and expand sales volume threshold if your current limits cannot meet them
