We’re all familiar with Amazon’s “one click” payment option when purchasing goods. Well, did you know that this technology is about to expire? It’s true – and we all know that other merchants and card companies will come charging for this technology. What does this mean for the average merchant? Well – a lot.
High risk merchants need to find a high risk payment processing option, like the services offered by eMerchantBroker.com. While your business may not be considered “high risk”, these trendy payment options for your customers are. While Amazon’s option has been around for a few years, there is the risk of chargeback, thanks to the “one click” option. If something is accidentally ordered, and an chargeback is enacted, a mainstream processor may not tolerate your account anymore. With a high risk payment processor, it is simply an unpleasant part of business.
Each processor and acquirer calculates risk differently. To be considered a high risk, a completely different set of criteria come into play.
Generally speaking, risk is calculated in terms of fraud and chargebacks. How likely is the business to experience chargebacks? The more chargebacks, the higher the risk.
Some merchants actually seek out high risk payment processing, as it does come with certain advantages over traditional processing.
- Increased sales volume allowances
- Multi-currency options
- Recurring billing
While one perk of high risk accounts is leniency from acquirers when chargeback rates spike (low-risk accounts are quickly closed if the risk of chargeback liability increases), that perceived benefit rarely compensates for other consequences.
Merchants who wear the title of “high risk” really should carry elevated levels of risk. They shouldn’t simply be placed in that category because they didn’t, at one point, manage chargebacks effectively.
Depending on factors such as your industry, location or clientele, it may not always be possible to avoid a high-risk merchant designation. However, by mitigating controllable factors such as your chargeback rate, it is possible to reduce your risk level.