High-Risk ACH: 3 Tips for Businesses

Businesses that are classified as high risk for ACH payments may be worried about establishing a merchant account online, especially if they plan on experiencing high volume payment processing. Being considered high risk for ACH can cause a business to be less likely to receive the lowest rates for a payment processor’s services.

Clients that experience high volume payment processing need the services of an experienced internet merchant account provider to get software and hardware that works for businesses that are high risk for ACH. Understanding what risk means and how it’s calculated by processors can help businesses figure out the services they need.

What is an ACH Payment?

ACH (or automated clearing house) payments are transfers between bank accounts. A payment processor or bank collects and processes the account information and conducts the transaction. A business that experiences high volume payment processing can benefit from knowing how costs could increase with their risk level and what they can do about it.

What is High-Risk ACH?

Usually, this means that the industry in which the business operates has a high rate of chargebacks and transaction disputes, which is what is referred to as “high risk.” This means that they’re riskier for a payment processor, who will be on the hook for any chargebacks, even if they can’t recover the original transaction costs from the merchant. It can be helpful for businesses in these industries to know a couple of things about risk.

The first is which industries have higher risk naturally. These include things like pharmaceuticals, healthcare, timeshares, and gambling, among others. All of these industries have a statistically higher rate of potential chargebacks, which makes them riskier investments for a payment processor.

Businesses also should know that risk isn’t calculated on a single standard. Different payment processors may assess risk differently. This means that evaluating risk to prepare for it requires some guesswork.

Even so, there are a couple of things a business can do.

How to Mitigate Risk

Businesses with high volume payment processing that want to mitigate their high risk for ACH payments should offer echeck services as a way to circumvent interchange rates. They’re processed differently and not subject to the same restrictions as ACH payments.

The biggest thing a business can do is find the right internet merchant account provider. The right one will work with a business of any risk level to provide products and services that make high-risk ACH payments quicker and easier.

The Takeaway

Being classified as “high risk” for ACH processing can negatively affect a business. Knowing the risk of certain industries and how to prepare for it can help.

Visit charge.com or call (888) 924-2743 to view options for online merchant account services for businesses, no matter the risk in their industry.

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