High Risk Payment Processor ensures that a high-risk business bring in the efficient payment transaction for the business. Traditional financial institutions are likely to consider your company high risk if it has one or more of the following characteristics: bad credit, free trials, recurring billing, high-ticket sales, high rates of fraud, or a high number of chargebacks in your industry. This is typically the criterion used to define high-risk customers.
Customers who are considered high risk typically do business in high risk industries. This can include cryptocurrency companies as well as companies that sell alcohol or CBD products. Payment processing with traditional financial institutions can be difficult, if not impossible, for high-risk businesses.
PayCly specializes in high-risk payment processing, allowing us to provide payment gateway processing services to your high-risk business.
Who are medium-risk clients?
Because medium risk customers frequently fall into the high risk category, there isn’t always a “medium risk” category. Customers who fall into this category often have transaction volumes under $20,000 per month, exclusively use one currency, average transaction values of $500 or less, operate in one low-risk country, incur few to no chargebacks, and belong to a low-risk sector of the economy.
What is the distinction between a high-risk and a low-risk merchant?
The classification of your company as high-risk or low-risk is determined by a number of factors, including industry type, credit history, ticket size, fraud activity, chargebacks, and billing model. Businesses are classified as low-risk merchants when they have a positive credit history, do not sell high-ticket items, have a low rate of fraud or chargebacks, and have minimal recurring billing or free trials. High-risk merchant account providers can assist you in determining whether your business is high-risk.
Showing proof of Anti-Money Laundering (AML) practises is an important part of becoming approved for payment processing, specifically for high risk customers in industries such as cryptocurrencies. AML refers to the policies and procedures in place to comply with legal requirements concerning suspicious financial activity. An AML procedure might include what is known as a holding period. This means that the funds from a transaction are kept in a separate account for a set number of business days.
Before opening a merchant account with an independent payment processing provider, crypto exchanges are frequently required to provide proof of their AML procedures.
Is your company considered high risk?
Whether or not your business is considered high risk gateway is frequently determined by the following factors:
Credit score: As in personal finance, businesses with bad credit (or no/limited credit history) may be classified as high risk.
Billing model: If your company offers free trials that lead to paid subscriptions, it is most likely a high-risk venture. Traditional payment processors frequently label subscriptions and other forms of recurring billing as high risk.
High fraud or chargeback rates in your industry: As you might expect, if you enter an industry with a higher-than-average fraud or chargeback ratio, your company will be labeled high risk.
KYC is frequently confused with AML practices, and while both are important, they are two distinct elements. While AML proof of practice is frequently required for crypt currency exchange businesses in order to open a merchant account/use payment processing services, KYC is a series of steps taken by the payment processing provider to ensure the customer is who they claim to be (and does not have a history of fraudulent activity).
Documents such as a passport, driver’s license, or government-issued ID may be requested as part of KYC. You may also be required to provide a voided check or bank letter, three months of credit card processing statements from your previous provider, and three months of bank statements.
So, if traditional financial institutions refuse to provide merchant accounts to high-risk customers, how can a high-risk business obtain one? By contacting a provider of high-risk merchant accounts. They can provide best payment gateway processing services to businesses with a higher likelihood of chargebacks or fraud than more traditional businesses, larger transaction sizes, high risk labelled industries, and order fulfilment timeframes that are considered too high risk.
PayCly is a high-risk merchant account and payment processing expert who looks out for our clients’ best interests. Our carefully curated selection of online and virtual payment gateways is ideal for high-risk businesses of all sizes. Contact us today to learn how PayCly can help your company succeed.