The variety of online selling platforms allows many to delve into the lucrative world of e-commerce. With that, many online businesses struggle to find the right credit card processors. Companies big and small grapple with banks closing their doors on them due to the risks processors would be taking on by working with certain merchants. If this has been your situation as an online business, it’s plausible that you’re considered risky.
The risk status of e-commerce merchants is based on their revenues, industries, and chargeback histories. Credit card processors and banks use high-risk or low-risk labels in their decision to work with a business. The more income and chargeback requests a merchant has or may have based on their products, the more likely they will be identified as high-risk.
We will go through the differences between high-risk and low-risk businesses so that you can identify which category your company is under. No matter your risk level, Revitpay offers credit card processing for whatever industry you operate in. However, the needs of each risk type vary. This article gives a better understanding of the kind of merchant account that you have and how we can help you as your credit card processor.
What Determines Your Business as High-Risk or Low-Risk?
If your e-commerce business has already gone through the hassle of starting and developing, you may be wondering, “What risk? Haven’t I done the risky thing already by starting a company?”
This isn’t the wrong thing to ask – there are high stakes financially when starting a venture. You have done the risky thing, but banks will categorize the level of risk your account poses and how much your business might cost them.
Here, we will take a closer look at what processors watch out for when evaluating a merchant account.
Revenue
A company’s monthly sales total, average credit card transaction amount, and the types of currency accepted all play huge roles in determining risk level.
The more a company makes, the more likely it is that they sell to a broader range of clients on an e-commerce platform. The chances of being hit with chargeback requests are very probable. E-commerce businesses with international audiences would also be taking in foreign currency, which banks are also wary of.
A business making at least the threshold amount may also report producing around $500 in an average credit card transaction. Merchants with products in the triple-digit price range, like airlines, would naturally fall under the high-risk category.
These characteristics usually spell “burden” to processors due to the considerable likelihood of chargebacks. Yet, it doesn’t have to be that way. Let’s keep reading about other risk differences before learning about the benefits high-risk companies can have with Revitpay.
Meanwhile, low-risk merchants primarily conduct card-present transactions and have a smaller customer network. Banks trust these accounts more, but these merchants also have a cap on their monthly sales volume and thus may not produce as much as high-risk businesses.
Industry
The number of industries that are branded as high-risk is nearly countless. Some sell products that the average person buys – like airline tickets, electronics, and furniture. Others are specialized, including CBD products, weapons, and credit repair.
Processors know which industries usually break the chargeback-to-transaction ratio threshold. Certain products garner high chargeback rates and many due to being sold online. Subscription-based and membership-related businesses commonly receive high chargeback requests as well.
Card-not-present companies are not only high-risk but susceptible to fraud. As busy as you are running a business, fraud is the last thing you want to worry about. Fortunately, Revitpay does have a solution for that.
Low-risk industries include card-present companies selling basic goods such as clothing and office supplies.
History
What if you’re a startup, and you’re running around trying to find a credit card processor willing to work with you? Yes, naturally, new businesses are considered high-risk due to the uncertainty of financial outcomes. They have a bare history that does not advocate for them.
On the other hand, the TMF (Terminated Merchant File) hosts a list of merchants who’ve had accounts terminated in the last five years. Banks refer to this list to further investigate whether or not the business should house an account with them. Being on the TMF guarantees your company is high-risk.
The possibility of having your name on the TMF is scary. That is why when you choose Revitpay as your processor, we will make every effort to prevent that from happening. We go above and beyond to make sure that you thrive as a high-risk merchant account. We do this through chargeback alerts that can help keep your chargeback ratios as low as possible. We also act as your (Payment Card Industry) technician by giving you access to the best PCI audited tools and other exclusive benefits.
Revitpay is an inclusive credit card processor that serves both low-risk and high-risk companies. Whether you’re new to e-commerce or have been in business for years, we provide answers to your merchant account needs.
The variety of online selling platforms allows many to delve into the lucrative world of e-commerce. With that, many online businesses struggle to find the right credit card processors. Companies big and small grapple with banks closing their doors on them due to the risks processors would be taking on by working with certain merchants. If this has been your situation as an online business, it’s plausible that you’re considered risky.
The risk status of e-commerce merchants is based on their revenues, industries, and chargeback histories. Credit card processors and banks use high-risk or low-risk labels in their decision to work with a business. The more income and chargeback requests a merchant has or may have based on their products, the more likely they will be identified as high-risk.
We will go through the differences between high-risk and low-risk businesses so that you can identify which category your company is under. No matter your risk level, Revitpay offers credit card processing for whatever industry you operate in. However, the needs of each risk type vary. This article gives a better understanding of the kind of merchant account that you have and how we can help you as your credit card processor.
What Determines Your Business as High-Risk or Low-Risk?
If your e-commerce business has already gone through the hassle of starting and developing, you may be wondering, “What risk? Haven’t I done the risky thing already by starting a company?”
This isn’t the wrong thing to ask – there are high stakes financially when starting a venture. You have done the risky thing, but banks will categorize the level of risk your account poses and how much your business might cost them.
Here, we will take a closer look at what processors watch out for when evaluating a merchant account.
Revenue
A company’s monthly sales total, average credit card transaction amount, and the types of currency accepted all play huge roles in determining risk level.
The more a company makes, the more likely it is that they sell to a broader range of clients on an e-commerce platform. The chances of being hit with chargeback requests are very probable. E-commerce businesses with international audiences would also be taking in foreign currency, which banks are also wary of.
A business making at least the threshold amount may also report producing around $500 in an average credit card transaction. Merchants with products in the triple-digit price range, like airlines, would naturally fall under the high-risk category.
These characteristics usually spell “burden” to processors due to the considerable likelihood of chargebacks. Yet, it doesn’t have to be that way. Let’s keep reading about other risk differences before learning about the benefits high-risk companies can have with Revitpay.
Meanwhile, low-risk merchants primarily conduct card-present transactions and have a smaller customer network. Banks trust these accounts more, but these merchants also have a cap on their monthly sales volume and thus may not produce as much as high-risk businesses.
Industry
The number of industries that are branded as high-risk is nearly countless. Some sell products that the average person buys – like airline tickets, electronics, and furniture. Others are specialized, including CBD products, weapons, and credit repair.
Processors know which industries usually break the chargeback-to-transaction ratio threshold. Certain products garner high chargeback rates and many due to being sold online. Subscription-based and membership-related businesses commonly receive high chargeback requests as well.
Card-not-present companies are not only high-risk but susceptible to fraud. As busy as you are running a business, fraud is the last thing you want to worry about. Fortunately, Revitpay does have a solution for that.
Low-risk industries include card-present companies selling basic goods such as clothing and office supplies.
History
What if you’re a startup, and you’re running around trying to find a credit card processor willing to work with you? Yes, naturally, new businesses are considered high-risk due to the uncertainty of financial outcomes. They have a bare history that does not advocate for them.
On the other hand, the TMF (Terminated Merchant File) hosts a list of merchants who’ve had accounts terminated in the last five years. Banks refer to this list to further investigate whether or not the business should house an account with them. Being on the TMF guarantees your company is high-risk.
The possibility of having your name on the TMF is scary. That is why when you choose Revitpay as your processor, we will make every effort to prevent that from happening. We go above and beyond to make sure that you thrive as a high-risk merchant account. We do this through chargeback alerts that can help keep your chargeback ratios as low as possible. We also act as your (Payment Card Industry) technician by giving you access to the best PCI audited tools and other exclusive benefits.
Revitpay is an inclusive credit card processor that serves both low-risk and high-risk companies. Whether you’re new to e-commerce or have been in business for years, we provide answers to your merchant account needs.