Five Questions to Ask Your High-Risk Merchant Processor


    Collection agencies, online pharmacies, and consumer finance companies – what do they all have in common? They are considered high-risk merchants in the world of electronic payment processing. This label is almost impossible to avoid, and obtaining a merchant account through traditional banks is most likely a dead end.

    As a high-risk merchant, finding a reputable merchant processor for your high-risk enterprise is challenging.  But, like any other business, you need a fast, proven, and compliant payment processor for your business to thrive. So, how do you find a knowledgeable and reliable high-risk merchant processor?

    To help you make the right decision, we’ve outlined five essential questions to ask payment processors as you weigh the options.

    1. How long have you offered high-risk merchant solutions? 

    You have enough things to worry about while running your business. The last thing you need to be uncertain about is your processor’s competency. A provider that’s been offering high-risk merchant solutions for a long time most likely has experience delivering payments to your specific industry and business model.

    Knowing the answer to this question avoids false hopes and incorrect recommendations. While new processors may be knowledgeable, they may not have experience handling all areas of your business.

    2. Is customer support provided?

    Dedicated customer service is essential when it comes to payments. It’s no reach to say high-risk enterprises need more attention than most. Bear in mind; fraudulent activity can freeze deposits. On the other hand, a plethora of chargebacks may shut down your merchant account.  As such, you need a knowledgeable and responsive team to sort these concerns fast. If you’re a collection agency wanting to dwindle your chargeback ratio, read our informative blog here.

    Ask if your business receives a dedicated account manager and how they can be reached directly. Also, find out what a processor’s average response time is – the quicker, the better. Personalized and dialed support is critical here; make sure you know what you will receive and hold your processor to their words.

    Additionally, find out whether they offer online, real-time reporting and a cost associated with the service. Processing companies who provide this free value transparency should move to the top of your list.

    3. Are there limitations to the types of payments accepted? 

    Whether high-risk or not, your business relies on getting paid. The ways a consumer can pay a company is increasing on an almost daily basis – credit card, bank transfers, PayPal, electronic check, debit card, Venmo, cash, Western Union…the list goes on and on.

    Unfortunately, you may have limitations to the electronic payment modes you can accept as a high-risk merchant. The specific industry your entity operates within is the most significant factor to determine what types of payments you are allowed to take. Still, your acquiring bank also had a considerable say in the matter when approving your account. Your business may only qualify for debit-only payments. In a similar vein, you might not be able to process all major card brands. Typically only qualified merchants can accept American Express and Discover. It’s imperative to clearly understand what payment types you will take when selecting a payment processor.

    4. Do I have a monthly minimum? 

    High-risk merchants can fall prey to numerous junk fees tacked on their merchant account unbeknownst to them. Absolutely review all costs your business will be responsible for on a monthly or annual basis – but always get a clear answer as to whether you are assessed a monthly minimum. If so, how much is it?

    A monthly minimum fee is imposed when businesses don’t process sufficient volume to cover a predetermined amount in processing fees. Average fees, even for the high-risk merchant, is between $15-$30 a month. Most merchants don’t know that processors can determine the costs that count toward the monthly minimum and those that don’t. This is where it can get expensive quickly. Make sure you understand the details and ask if the fee is fixed or not.

    Additionally, it would be best to consider processing companies willing to reduce your monthly fees and rates after some time. In many instances, startup businesses are priced higher due to the elevated risk. After establishing a reliable credit card processing history, your merchant provider should be willing to review your account for a potential reduction in fees.

    5. Do you offer scalable solutions? 

    Many high-risk merchant processors only offer one payment solution. Maybe they solely offer a MOTO or web solution – that’s all you get. As your business grows, you do not want to be held back by not expanding your payment offerings. Can you scale up and offer more ways for consumers to pay you? Adding an IVR or Pay by Text solution can quickly maximize profits once your business holds the market share.

    If your payment processor is experienced in your industry, be sure to ask what solutions are best for your business. Maybe a convenience fee model is perfect for your setup, and you weren’t aware of the offering beforehand. A knowledgeable payment processor will answer all your questions and make sure you have the best payment solutions for your business.

    Your Payment Partner™

    We hope you find this rundown useful when vetting a new merchant processor. Keep in mind there are caveats to high-risk payments, and choosing an establishing leader in the space can save you time, money, and hassle down the road. As we celebrate our tenth anniversary, Payment Savvy is proud to be able to say we’ve helped high-risk businesses across the nation create reliable and dependable revenue streams with our seamless payment technology. When you’re ready for a better way, give us a call.

    Responsible for keeping Payment Savvy running like a well-oiled machine, Eli has extensive experience with everything related to technology and financial services. Maintaining back-end operations efficient and productive isn't his only strong suit, Eli is also a key component of our sales team and is in constant pursuit of perfection. In charge of ground-breaking partnerships, he is always on the lookout for the next innovative product offering for our Savvy clientele. Eli's knowledge of the payment processing cycle and critical compliance standards ensure our customer base always has an educated and expert opinion if needed.


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