There are actually many reasons a business could be considered high risk. If the owner has a low credit score or if the business is a startup with no credit history. Businesses that are opening in very competitive fields or in new fields that have no been tried and proven can also be considered high risk. Businesses that have a target market far from their home country can be high risk due to the distances which can cause confusion on credit cards statements.
Note: In cases like these it is important to let the customer know exactly what they will find on their credit card statement so that they are not met with unexpected surprises when they get their credit statements.
Businesses that operate high amounts of cash could be considered high risk. If the average sale prices fall between $1000 and $10,000 there may be a high risk label associated with the business. Those transactions that are completed over great periods of time can be considered high risk. If there is a lapse of of more than a month between the date of purchase and the delivery of products or services, the customer may not recognize the payment and immediately cancel.
This last point is especially true for those travel industries that often make arrangements months or even years in advance. Those companies that offer special personalized or tailor-made products can also be labeled high risk for these reasons.
You may have a business that has been labeled high risk, but don’t panic. You can still run a competitive business and process your credit card payments regularly. Banks and processing companies may ask for more information on your business but their services will remain essentially the same. Other banks could require you to pay a higher processing fee to cover the risk they shoulder. Others could even require a reserve for your processing.
Once you have gotten past the original stage and pulled through without late payments and such, you will be able to enjoy a promotion to “low risk” status. If the business owner already has a positive credit history this can be taken into account when making the promotion. Changing from high risk business to a low risk can take years or months depending on the individual operating plans of the company.
Various processing companies will have different options to offer the high risk business. With a positive processing history it is fairly easy for the ne business to obtain an offshore merchant account. This is also called third party processing and is one of the most advantageous options if you can properly apply it to your business goals. In this case, there is a single merchant account for a variety of different businesses. Since the various businesses offset each others risk, this keeps the banks happy and makes this an ideal option for all. To know more about us visit the website at https://highrisk.solutions/.