Every online business needs a merchant account. When looking to start a business, a high-risk venture is very interesting and promising as there is the prospect of large profits as well as the possibility of significant growth. If your business falls into the high-risk category, you may struggle to find the right payment processor with reasonable fees and flexible contract conditions.
Merchants can be considered high-risk for multiple reasons. First of all, some industries are riskier than others with a large potential for chargebacks as well as fraud and money laundering. FMPay is ready to offer payment processing to the following high-risk businesses:
Other risk factors are a large volume of transactions (over EUR 50,000 per month) and a higher than average transaction (more than EUR 500), but this varies according to the industry and the size of business.
Apart from this, there are some other factors that could result your business being considered high-risk:
Being a high-risk merchant does not mean that you are doing something illegal and cannot be trusted. FMPay accepts high-risk merchants after conducting enhanced due diligence (EDD), which means that extra questions will be asked and additional documents requested. High-risk businesses will also be a subject to ongoing monitoring.The list of extra documents for a high-risk acquiring vary according to the industry you operate in. For high-risk original credit transactions (OCTs) you will need to have a licence in all regions where you will be performing these. Our risk mitigation measures that we apply on a case-by-case basis to high-risk clients include:
Your risk status can change as your business develops. For example, a sudden growth in transaction volume might become a risk trigger that will change your contract conditions.The rapid growth in high-risk businesses has led to the increased need for reliable and cost effective payment processing. To have your high-risk merchant account approved quickly, please pay attention to the following factors:
Product and service level along with customer care should always be your main priorities. These days, an excellent online reputation is critical in digital sales.Transactions in a high-risk area always have a strong possibility of chargebacks and fraud. The main condition of successful operation of a high-risk merchant account is keeping your chargeback ratio below the number stated in your contract. It is generally recommended to keep your chargeback ratio lower than 0.9% of your total transactions.We expect our high-risk merchants to have a solid understanding of chargeback mitigation measures and be ready to absorb the rolling reserve requirements. 15% of your transactions will be on hold with us for 180 days and then paid back to you after that period to cover possible chargebacks.Chargebacks will not only lead to big losses, but may even shut down your business following huge numbers of penalties from card schemes and payment processors as well as the inability to fulfil client refund requests. Read more about Mastercard excessive chargebacks programs here: https://fmpay.me/blog/watch-your-chargebacks Online fraud can take different forms, but the main threat is using lost/stolen card data, which leads to transaction laundering. Check our advice on how to protect your business from online fraud here: https://fmpay.me/blog/how-to-protect-your-business-from-ecommerce-fraud High-risk transactions require more stringent security measures, as well as full compliance with all legal requirements.