I Have a High Risk Business. Can I Set Up a Merchant Account?

When you decide to start a business, you may focus on what seems most obvious. Thus, you might come up with a business model, relying on a particular product or service to get you going. Or you might pick a niche business sector, and then begin working on your business name and logo. At some point, you may talk to a bank about opening a business account, or financing your startup.

That may be the first place you’ll hear the term ‘high risk’. Think of it as the financial institution’s equivalent of refusing to sell life insure to stunt-persons and adrenaline junkies–or charging a much larger premium if they do sell it.

Preventing risky business

In the business world, high risk businesses can include online gambling, companies making unproven health claims, or any business type with a statistically larger chance of chargebacks.

This is why some financial institutions refuse to back high-risk businesses. And it can be especially tricky when your business is based online, because bank-to-bank transfers and credit cards may be the most practical way to pay. So what happens when your credit card network won’t let you accept payments from customers due to your high risk status?

The answer is that you find a different credit card network. In particular, you need the right payment processor: one that is willing to work with high risk enterprises. This type of credit card processor may offer other benefits too. In addition to taking a risk on your business type, they may also be willing to forgive other financial challenges, like bad credit or prior bankruptcy.

Check and double check

There are several reasons for working with business people who have had past financial slip-ups. One is their own self-interest. Serial entrepreneurs often have multiple ventures before they make it big, and an experienced credit card processor recognizes this.

A second reason may be a less charitable assumption about your business. Some lenders and payment processors may try to take advantage of you, because they know you’re desperate. So when you do spot a payment processor that accepts high risk business, ensure their prices are competitive, and that they are not overcharging you.

Look into their past and current customers, and see whether they have any awards from or testimonials from their payment processing peers. And check if they have any other benefits, such as free equipment or free software.

For more information on setting up a high risk business, or to sign up for a own merchant account, please call (888) 924-2743 or go to Charge.com.