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Advice When Applying for a High Risk Merchant Account

Making sure that money comes in reliably and with as little hassle to the business – and its clients – is a primary concern of most small business owners, especially high-risk merchants.

There was a time when all merchants simply took cash face to face. But in e-commerce, credit cards are the “coin of the realm”. Having the ability to accept credit card payments is the key to ensuring the success of your enterprise.

The problem is, merchant accounts can be hard to get for businesses in high-risk industries. As industry insiders, E-Commerce 4 IM has been helping high-risk businesses get the merchant accounts they need, across a great variety of business types, for years.

We can help you lay the groundwork for a successful high-risk merchant account application to a merchant bank so that you can accept credit card payments online.

If you are thinking about setting up a merchant account, you can save yourself time and hassle by contacting us at 1-800-570-1347 or on our website.

What is a merchant account?

Although few think of it this way, a merchant account is in some ways like a line of credit extended by a bank to your business, especially if you are high-risk. Like a loan, high-risk merchant accounts are underwritten and require approval by a real human.

When a credit card charge is processed, the funds are held for a period of time. Then, the money is deposited in the business’ bank account; that is when those funds are available for your use. The merchant agreement also allows the bank to make debits from the business’ bank account for credit card processing fees and chargebacks. That is where difficulties sometimes arise, like bad credit and processing history as a result of, for example, excessive chargeback rates.

What is a chargeback?

A chargeback occurs when a customer’s credit card company, or “issuing bank” demands that a business makes good on a fraudulent or disputed transaction. This can be relatively common when dealing with high-risk product sales online. Every bank has a certain level of risk that they are willing to accept when it comes to potential chargebacks and all must comply with card association rules.

Since the use of a credit card by a customer guarantees that they will receive a good or service, the bank could wind up losing money on the charge if the business in question has insufficient reserves to cover the value of the chargeback. That is why the whole application process exists—to determine the risk a business might pose to the bank.

We offer comprehensive chargeback prevention, mitigation, and management services as well as high-risk merchant accounts and payment gateways. You can learn more on our chargeback mitigation page.

Putting your Best foot forward

When you apply for a high-risk merchant account service, making sure that your application is complete and that your business’ “house is in order” is essential to success.

A strong application is especially important if you run what banks term a “high risk” business: firearms sales, weight loss, nutritional supplements, coaching, skincare products, online courses, and credit repair are all examples of high-risk ventures. E-Commerce 4 IM specializes in helping high-risk businesses navigate the merchant account application process successfully. We’re here to help you with high-risk credit card processors. Here are our tips for success:

Your website must include the following critical elements:

  1. Refund or cancellation policy: Your customers need to be clear on what your policies are, and so does your high-risk merchant account provider.
  2. Privacy policy: Information security is a big deal in the e-commerce world.
  3. Terms & conditions: Payment processors want to see clear policies that they can feel comfortable with, especially when it comes to how payments are processed and how disputes will be settled.
  4. Transparent pricing for each product and service: The products should make sense for your line of business, and the prices should be available for review. The currency used in the purchase should be seen with the amount as well (US Dollars, etc.).
  5. SSL page(s) for personal and credit card information: This industry-standard secure connection is how you encrypt customers’ payment information – this simply shows as HTTPS in your browser window. Lack of data security could result in you losing the ability to process credit cards. Typically, this is provided by your shopping cart provider or web host.
  6. Customer service telephone number: Merchant account providers like it if customers can reach a live human being to help them with their issues.
  7. Shipping & Handling methods and projected delivery times: This information will show the payment processor that you are serious about delivering the product or service.
  8. Overall, a clear description of the goods and services listed on site: Your customers need to understand what you are selling, and so do the merchant banks.

Documents required for high-risk merchant account approvals:

The documents that you provide to the high-risk merchant account provider can make or break a merchant account application. At a minimum, you should be prepared to include:

  1. Voided Check or letter from your business account bank: A business account is essential for any enterprise wanting to accept credit cards.
  2. W9 or SS-4 from the IRS: These are the IRS documents that establish you as a business with an Employer Identification Number (EIN).
  3. Three months of bank statements: These give the payment processor an idea of your cash flow.
  4. Three months of prior processing statements: If you’ve accepted credit cards in the past, these statements will tell the bank the number of charges to expect, along with the highest and average value of those charges.
  5. Most recent tax return: This helps assure the merchant account provider that you are in the good graces of the IRS, and verified income. Depending on your business, this may not be required.
  6. Fulfillment Agreement: If you use a third-party shipper or dropship company, you’ll need an agreement guaranteeing that your products will be shipped.
  7. Driver’s license: The banks need to know who you are, after all.
  8. Articles of Incorporation: These are the formal documents filed with your state or governmental authority that establish you as a company.

Need help with a high-risk merchant account?

We help online businesses like coaches, online course providers, credit repair companies, and even CBD and supplement companies apply for and get approved for a high-risk merchant account. If you need to set up a high-risk merchant account, we can help.


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