What is High-Risk eCheck Processing for Business?

Businesses increasingly need to accept online payments. Products and services that used to be sold through a conventional POS (point of sale) systems have moved to online payment processing systems. This shift occurred gradually at first, and has speeded up substantially, partly as a result of the 2020 COVID-19 lockdowns. This means that stores that don’t offer credit, debit, eCheck, and other online payment methods are likely to be left behind.

This makes getting a credit card merchant account or an eCheck account extremely valuable. Any restriction against a business being able to open at least one of these accounts could have a huge impact on the company’s profitability and sustainability. This leaves many business owners wondering: how does a business that is considered high-risk obtain echeck processing?

Why do Businesses Need to Accept Online Payments?

Merchant accounts and eCheck accounts offer businesses the ability to sell products and services online and to accept payment from customers’ debit cards, credit cards, echecks, or other forms of eCommerce. Payment processors offer these accounts to businesses, but not all of them are available for businesses considered “high-risk” for echeck processing. Therefore, it’s essential for businesses to know what this means and how they can avoid it.

High Risk for Echeck Processing

A payment processor may classify a business as high risk if the processor determines that the business’s transactions have a higher statistical likelihood of being charged back. While many factors may affect a business’s classification, the most common one is the industry in which the business operates. In other words, businesses whose industry tends to receive chargebacks may have to deal with the restrictions that many payment processors place on them simply because their business exists within that industry.

These industries can include pharmaceuticals, timeshares, gambling, and any other industry with a statistically higher rate of returns or chargebacks. Businesses in these or related industries should be aware that payment processors may consider them high risk for echeck processing and may be less likely to process their accounts through an online merchant account.

What Businesses Can Do

The first thing such a business can do is to take heart! The fact is that being approved for an eCheck account is much, much easier than being approved for a credit card merchant account. This means that businesses in practically any industry can accept eChecks from their customers!

Still a business may wish to improve their risk level in order to also accept credit cards, or to be able to do so at a more favorable rate. Since a business’s industry is the major factor in determining its risk level, one option is to remove some offerings from their online store. For example, a health food store might sell “nutraceuticals,” (which are defined as nutritional supplements that are offered along with claims of medical benefits). If these products are only a very small portion of the store’s offerings, then eliminating just those items is likely to be enough to change the classification of the store from high-risk to low-risk.

Improving the company’s financial standing could help, so consolidating debt or–better still–paying it off, can have a large impact in some cases.

The best thing a high-risk business can do is to find a merchant account provider that is happy to work with businesses that are high risk for eCheck processing.

The right provider will also offer high processing capacity, fast approval rates, a reliable processing network, and their verification systems for businesses regardless of whether they are classified as high risk.

The Takeaway

Working in an industry that is classified as high risk for echeck processing can limit a business’s options by denying them access to all-important online merchant account services. However, eCheck payments will still be available to almost any business, regardless of whether it has been classified as high-risk. The key is to find a provider that offers payment systems to businesses regardless of risk level.

Visit Charge.com or call (888) 924-2743 to find eCheck and online merchant account products and services for businesses, no matter the risk level of their business or industry.

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