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Businesses deemed "high-risk" must have a high-risk merchant account in order to accept debit and credit card payments. A company is deemed high risk if it has a high chance of chargebacks or fraud, among other things.<br>In the payments industry, however, there is no unified structure or methodology that evaluates the risk indicators specific to a company. However, there are specific restrictions for each bank and payment processor.<br>
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Join now Sign in People First Name Last Name Explore topics Marketing Public Administration Healthcare Engineering IT Services Sustainability Business Administration See All What is High-risk Merchant Account, and How Does It Differ from a Regular One? WebPays + Follow Published May 23, 2023 More businesses are looking for affordable payment processing options as the volume of digital payments keeps increasing. Just 19% of consumers still prefer cash payments. Even while the majority of payment service providers serve a variety of industries, there are some businesses they are slightly warier of. These usually fall under the category of high-risk industries, which are more susceptible to chargebacks and fraud. It will be challenging to discover the best payment processor if your business is "high-risk." Who, however, determines if a business is high- risk? And what factors affect risk? In this post, we'll clarify in detail high-risk merchant accounts in the Netherlands. What is High-risk Merchant Account? Businesses deemed "high-risk" must have a high-risk merchant account in order to accept debit and credit card payments. A company is deemed high risk if it has a high chance of chargebacks or fraud, among other things. In the payments industry, however, there is no unified structure or methodology that evaluates the risk indicators specific to a company. However, there are specific restrictions for each bank and payment processor. Some payment solution providers may be cited in relation to the sectors they do not serve. Others frequently seek out particular information about a business in order to evaluate the risk involved and determine whether to accept or reject their application. Everything ultimately boils down to the internal standards and risk management philosophy of a payment processor. Like Comment Share
Why are Some Businesses determined high-risk? Join now Sign in Businesses from particular industries may be automatically labelled high-risk firms since they pose higher risks. Listed below are a few instances of high-risk professions: CBD (Cannabidiol), e-cigarettes, and vape Stun guns and tasers Credit Repair Multilevel Marketing (MLM) Adult products/services Pawnshops Supplements and nutraceuticals Tech support Search Engine Optimisation (SEO) services In addition to this, numerous other elements could cause a company to be classified as "high-risk": If you are a new participant and have never processed payments previously, some processors may classify you as "high-risk." Other crucial criteria include having a bad credit history or low credit ratings due to loan defaults. Your risk perception may also increase if a processor has already added you to the MATCH list. The same applies to companies that sell contentious goods or operate on precarious legal grounds. High-risk scores may also apply to companies whose overseas sales are highly dependent. This is a result of the foreign economy's comparatively unpredictable economic processes. Industries subject to many government or legal regulations are frequently called "high-risk." How is a High-risk Merchant Account Different from a Regular Account? A high-risk corporation designation can be highly daunting. Your application may simply be rejected by a processor. To lessen the risk to your company, a payment processor could elect to follow particular rules. A payment processing company can lower risk in many different ways. These also highlight the crucial differences between high-risk merchant accounts and regular merchant accounts. Protracted Application Process -: A merchant services provider in the Netherlands may ask for a lot of details when you register for a high-risk merchant account so they may evaluate your risk profile or look at prior financial trends. Payment processing companies regularly examine your business, your partnerships', and even your credit history (to watch out for things like bad credit, etc.) when processing payments.
Greater Costs for Payment Processing – : Join now Sign in The average small business may pay 0.3% more for payment processing than the Dutch interchange rate. For a high-risk merchant account, this might rise to 1.5% plus the interchange fee. Even though interchange prices may differ from company to company, in the Netherlands, higher risk often requires higher fees. Requirements for Cash Reserves -: Some suppliers of payment solutions may even hedge a particular sum of money for a company. They have a variety of options for maintaining the reserve's thresholds, including: Rolling reserve - A high-risk payment processor places every transaction you handle away, and you will later get that percentage. It might be as much as 10%. For instance, if you have a six-month rolling agreement, you get the remaining amount in July. Maximum reserve - The processor keeps a percentage of each transaction until the cash reserve reaches a specific amount. The reserve will still exist after the per-transaction contributions have stopped. Forward reserve - A predetermined sum is paid upfront by the merchant to a high-risk merchant account. The processor may occasionally halt all transactions until the merchant pays the specified sum. Increased Chargeback Costs -: When processing reimbursements, businesses must pay chargeback fees to their payment processor. To cover the possible risks of too many chargebacks, these fees could be higher for businesses with a high chargeback ratio. These costs per unit could range from $20 to $100. Companies with high chargeback rates, such as clothing retailers, may therefore feel pressure. Volume Caps on Credit Card Processing -: If your sales volume surpasses a certain threshold, some credit card processors may stop letting you process further transactions. Processors believe that when working with large volumes, hazards may increase. Additional Conditions -: Some processors may have extra limitations for providing services to high-risk merchants, depending on the type of business. If you sell age- restricted products, the processor might advise you to use tools that make sure you aren't doing so to children. They could refuse to activate your processing account if you don't fulfill all the prerequisites. Does WebPays is Best for High-risk Merchant Accounts? Only a select few providers will be available to high-risk merchant account, and WebPays is one of them. WebPays will support your business if you're high-risk. Despite this, many high-risk companies approach us to see if we can help them. The main benefit of joining WebPays is that a merchant will undergo an underwriting procedure before receiving their high-risk merchant account in the Netherlands. This method helps you save valuable time (and money) by identifying risk indicators early on. With WebPays, merchants can get many more advantages that help them to run their businesses and earn more and more profits. We need
only three to seven working days to approve your high-risk merchant account in the Netherlands. Join now Sign in Conclusion The explanation above makes it evident that certain businesses have built-in risk elements. The term "high risk" has different meanings for merchants and processors. More importantly, although many payment processors have simple access points, merchants always run the danger of being disconnected. You can be sure there won't be any unpleasant surprises down the road by selecting a processor like WebPays. Call us right away to schedule a consultation so we can assess the risk factors facing your company upfront and help you save time; as a result, you can obtain your high-risk merchant account in the Netherlands. To view or add a comment, sign in More articles by this author Adult Toys Merchant Account: Challenges… May 20, 2023 How to Choose the Right Payment… May 19, 2023 International Payment Gateway is The Best… May 18, 2023 T i M © 2023 About Accessibility User Agreement Privacy Policy Your California Privacy Choices Cookie Policy Copyright Policy Brand Policy Language Guest Controls Community Guidelines
