Lowering High-Risk Payment Processing Costs


    Identifying as a high-risk business creates several hurdles for your company. One consistent concern is the high cost of payment processing. Offering electronic payment options – such as web payments, recurring billing, or IVR – is imperative for your business’s success. Therefore a merchant account is a must. Avoiding unfavorable contract terms and the high costs of a high-risk payment processing account is probably at the forefront of your mind reading this. Read on to learn how to lower your credit card processing rates and obtain a trusted payment partner.

    High-Risk Merchant Account Fees 

    Applying for a high-risk merchant account can leave your head spinning. There are many fees associated with high-risk payment processing. While some are standard no matter the industry, many expenses are unfortunately exclusively seen in the high-risk realm. Traditionally the high costs offset the processor’s risk of approving a business for card processing in a high-risk vertical. Take time to review and understand all costs associated with your merchant account – both at boarding and regularly. Some high-risk merchant account fees include:

    • Set-up Fees – Essentially, the amount paid upon merchant account approval
    • Early Termination Fee – If in a contract, the amount obligated to pay to close your merchant account
    • Reserves – A cash reserve holding a percentage of all processed payments to reduce a bank’s exposure
    • Non-Compliance Fees – Typically associated with PCI, this fee can cover a wide variety of compliance concerns

    While these fees are typical, they can be unfairly exorbitant. Be sure to ask questions and discuss your payment needs with several processors before signing on the dotted line.

    How to Reduce High-Risk Processing Costs

    Do all these fees have your head spinning? It’s normal to look for a way to cut costs. While paying less is always a good thing, be sure it’s not your sole focus. Paying a “too good to be true” rate could mean your processor is not well-versed in your high-risk business. This leads to instability and the potential of having your merchant account closed through no fault of yours.

    It’s, therefore, essential to find a high-risk merchant processor with experience in your business model. They will approve your account the right way and create a solid foundation for you to grow your business. That said, there are ways to reduce your payment costs – even as a high-risk merchant. Check out these helpful tips!

    Read your contract

    As obvious as that sounds, it’s worth typing out. Many business owners sign contracts quickly before understanding all the details. This is one scenario where you don’t want to sign now; ask questions later. It’s a costly mistake for your business!! Read everything thoroughly – ask all the questions on hand – be comfortable with the answers – negotiate fees you are uncomfortable with. A reputable payment processor will gladly take the time needed to help you understand all the details.

    Choose a Reliable Payment Processor

    Just because you are a high-risk merchant does NOT mean you need to settle for a sub-par payment processing experience. Take time to understand the support you’ll have available, the scalability of services, and the software integrations available. Be sure to weigh the pros and cons of potentially paying a little more for a payment solution best fitting your business model versus paying less for a generic solution. At times, spending more could mean less frustration, effort, and ultimately unexpected costs.

    Request Annual Rate Reviews

    Like any business, loyalty is something payment processors crave. Don’t be afraid to request an annual rate review to see if your costs can be reduced anywhere. If you are an exemplary high-risk merchant with low chargebacks and consistent volumes, don’t be surprised if you receive substantial cost savings without the hassle of switching providers.

    Final Thoughts

    Being termed as a high-risk merchant does not automatically mean you’ll be paying an arm and a leg for payment processing. If you take the time to review your options and commit to being an above-average merchant, you will find fair prices along with quality services. Interested in learning about our payment solutions, reach out to us today for a no-strings-attached discussion. For over a decade, Payment Savvy has provided innovative payment solutions to high-risk merchants across the country. It’s time to experience a better way!

    As our resident “numbers guy”, Tracy is responsible for Payment Savvy’s financial planning, analysis and projections. With 20 years of accounting experience under his belt with various CPA and high technology firms, we look to him to ensure our fiscal future stays in the black. He is a highly regarded member of our team and we appreciate his hands-on approach and diligent attention to detail.  With Tracy we are able to apply innovative, practical and outcome driven financial strategies to take Payment Savvy to the next level.


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