Home Finance What is the guidance for no credit checks and high-risk merchant accounts in 2022?

What is the guidance for no credit checks and high-risk merchant accounts in 2022?

If you are thinking of choosing the best merchant account for online business, then there may be two reasons behind this. Either you work in a high-risk industry, or your business has a poor credit history. In both these cases, you will be forced to pay higher transaction costs. However, choosing a professional merchant service provider can help you with an account with acceptable fees.

It has been identified that a high-risk merchant service provider accepts liability for the increased risk of doing an in-depth analysis by involving more complex processes. Here, the calculation of risk is different based on the business’s generating chargebacks. Moreover, choosing merchant card payment providers in the UK can help to maintain the highest security level and fraud management. Additionally, a reliable payment provider used to have extensive experience and knowledge in this specified market that can help to boost your business. 

Who are the high-risk industries?

There are many industries that have high risk and need merchant card payment providers in UK. Here, the high risk does not refer to the unprofitable business; it refers to that where the bank feels the business has a strong possibility of fraud, chargebacks, and refunds. These high-risk industries include:

  • Adult content, services, and products
  • Dating
  • Travel, tickets, and booking
  • Both online and offline Casinos and gambling
  • E-cigarettes and vaping
  • Alcohol products, off-licences, and beverages
  • Drugs and related paraphernalia or accessories
  • Digital downloads
  • Payday loans
  • Money Transfer
  • Investment schemes
  • Software and other downloads
  • Health supplements and wellness products
  • Electronics
  • Credit Repair
  • Web hosting and ISP services
  • Game codes and hacks
  • Technical support and web development
  • Massage parlours and tattoo studios
  • Replicas
  • Nightclubs or cabaret bars
  • Smartphones including spare parts, sales, and resale 
  • Phone locking services
  • Car parts
  • Watches, jewellery, and related accessories.

What’s the key difference between a standard account and a high-risk merchant account?

There are many key differences between a standard account and a high-risk merchant account. First, you can see the difference in settlement period and fees after getting approval of the high-risk merchant account. Basically, certain things are associated with a high-risk account that makes it different from a standard one, which is discussed below.

  • A high-risk merchant account usually involves a higher reserve. Here, you need to leave nearly 15{86b567321bb25cd749b61d53f86e9b99794e156fcea53d99e3c904814cea3e93} of the transaction money in your account to handle chargebacks, potential fraud, etc. 
  • This account has higher annual fees and monthly fees. Thus, you can expect to pay more than £50 monthly.
  • It takes longer settlement periods. Sometimes it may take 1 week, whereas it is easily done within 3 days in a standard account.  
  • When you use a standard merchant account, the transaction fees fall under 1{86b567321bb25cd749b61d53f86e9b99794e156fcea53d99e3c904814cea3e93}. But a high-risk merchant account takes higher transaction fees based on the industry type. Sometimes the overseas transaction fees go up to 10{86b567321bb25cd749b61d53f86e9b99794e156fcea53d99e3c904814cea3e93}. 

What if you have bad credit and work in a non-risky industry?

In case your business falls into a non-risky industry and consider a bad credit risk, then it’s always better to look for the best merchant account for online business. Initially, you may have to pay a higher amount of fees, which can help to improve your credit score, and you will be out of high risk by consistent payment of your bills on time. 

How do you choose High-Risk Merchant Service Providers?

There are many options associated with a high-risk merchant account. Thus, how to pick the right high-risk merchant account for your business. Here is the list of things that you need to consider for your business while choosing the best high-risk merchant account.

Do your service providers work with other merchants in your business field?

If your high-risk merchant account provider works with other merchants in your industry, then it’s a good option for your business. These professionals know the industry well, so they can tell you about typical transactions and how to detect fraud.

  • What is your service provider’s total fee structure?

One of the most important things that you must consider is the total fee structure, including discount rate, transaction fees, and monthly fees. Some high-risk merchant account providers may charge you high monthly with low transaction fees, whereas some service providers may provide low monthly fees with a high discount rate.

  • Do they have a customer service line you can call?

The unfortunate downside of working in higher-risk industries is that occasionally problematic payment situations arise. If that’s the case, it’s nice to know you pick up the phone and talk to someone right away.

Overall, following these guidelines can help you to choose the right service provider for a merchant account. When choosing the best merchant account for online business, you can consider the services of We Tranxact Ltd that can help to increase your sales, avoid bad checks, better money management, and many more.



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