As a business owner or manager in a high-risk industry, it’s important to choose a payment processor that is both secure and dependable, but one that also specializes in merchant processing for high-risk industries. With so many options on the market, it can be difficult to know where to start. However, by doing your research and carefully considering your needs, you can find a superior high-risk payment processor that will meet your needs and provide peace of mind. In this blog post, we’ll explore how to find a high-risk payment processor that is secure, reliable, and flexible to meet your businesses’ needs. We’ll also provide some tips on what to look for when choosing a processor. By the end of this post, you’ll have all the information you need to make an informed decision about which high-risk payment processor is right for your business.

IMPORTANT: Read the Terms and Conditions Carefully.

When signing up for a high-risk merchant processing account, it’s important to take the time to read and understand all the terms and conditions. Ensure the processor works with your industry as they usually vary based on high-risk industries such as tobacco, marijuana, payday lending, and gambling. Additionally, check on any policy related to cancellation so you can rest assured that if needed, you are covered.

Many merchant processors will try to lock you into a contract and won’t let you cancel without paying a hefty cancellation fee. Another thing to be on the lookout for is a liquidated damages clause, which in effect charges you the estimated amount of profit the processor anticipates to earn off you for the remainder of your contract period if you simply decide to stop processing payments with them. Other things to check include opt-out fees and auto-renewal terms. Taking an extra few minutes to review and understand the details now could save you a lot of money, headaches, and time in the future.

Research Your Options for High-Risk Payment Processors

When researching options for high-risk payment processors, it is important to ensure that they are compatible with your specific industry. When assessing fees, it’s important to consider setup, renewal, and hidden costs. Analyze the fee structure, rates, and any special equipment required to use the service. Make sure you consider both the upfront costs and long-term expenses associated with any program you decide on. Additionally, think about how integrations with other payment systems will benefit your business and make running operations more efficient. Consider the features that a payment processor offers, as this may provide further value beyond what was anticipated at first glance. It is important to weigh all of these factors when researching your options so that you can make an informed decision on the right processor for your business.

Understand the Rate Structures of Merchant Processors

There are four types of rate structures used by merchant processors; interchange-plus, flat rate, subscription, and tiered. Understanding the different types of rate structures used by merchant processors is critical for making an informed decision when selecting a payment processor, as there can be considerable cost differences between the various rate structures offered. It’s important to analyze each one carefully and compare costs before committing to any plan. Here are the four types of rate structures:

Interchange-plus

This is a transparent pricing structure where the merchant processor charges a markup fee over the cost of interchange fees set by card networks such as Visa and Mastercard. The merchant can see exactly what the interchange fee is being charged to them and how much the processor is marking it up. This type of pricing is favored by merchants as it makes it easier to compare rates and fees between different processors.

Flat rate

Flat rate pricing is a simple pricing structure where the merchant is charged a flat fee per transaction, regardless of the type of card being used or the transaction amount. This structure can be easy to understand and budget for, but it may not be the best option for merchants processing high-value transactions as the flat fee will be a larger portion of the transaction amount.

Subscription

This type of pricing involves a monthly or annual fee for access to the merchant processing services, in addition to a per-transaction fee. This structure may be suitable for merchants with a high volume of transactions, but it may not be cost-effective for merchants processing a small number of transactions.

Tiered rate

This pricing structure groups transactions into different tiers based on factors such as card type (debit or credit), transaction size, or the level of risk involved. The merchant is then charged a different rate for each tier. This structure can be less transparent than interchange-plus pricing, and it may be more difficult for merchants to compare rates and fees between processors.

Compare Features & Benefits

When choosing a service for your business, there’s a lot of important information to take into consideration. Comparing fees and features should be a top priority to ensure you’re getting the best value for your money. It’s also equally important to read reviews from other customers who have used the product or service so you can make an informed decision. Doing your due diligence on fees, features, and reviews is the best way to find the perfect fit for your business that fits both your budget and needs.

Read and Compare Reviews

Reading and comparing customer reviews is an essential part of selecting the right merchant processor for your business. Reviews provide invaluable insight into a processor’s customer support and the features that their customers enjoy or dislike. By reading reviews, you will get a better idea of the overall experience customers have when using each service. Additionally, reviews can also alert you to potential problems or issues that customers have experienced with a particular processor. Be sure to read both the positive and negative reviews to get a comprehensive picture of the processor before making your decision. It’s also important to see why people leave negative reviews, people can be petty and might leave a negative review because they tried to sign up for a processor that doesn’t work with their industry. It’s common practice for high-risk merchant processors to focus on one or a few select industries due to the complexities of high-risk industries.

Choose a Processor that Includes Fraud Protection and Chargeback Prevention

Processor fraud protection and chargeback prevention are critical to businesses’ success. Without sufficient fraud protection measures in place, businesses run the risk of hefty, expensive chargebacks that can eat away at profits. Chargebacks aren’t just inconvenient – they’re costly, and no business should have to shoulder that burden without effective fraud prevention protocols in place. Choosing a processor with comprehensive fraud protection methods will help keep your business safe from fraud and save you from experiencing costly repercussions. A good rule of thumb is that merchant processors that specialize in a specific niche will provide better fraud protection and chargeback protection because they understand the intrinsic details of their respective industry specialty.

Choose a Secure Processor that is PCI-Compliant

When choosing a processor for your business, PCI compliance and security should be among your top priorities. PCI compliance ensures that your company meets the specific data protection requirements to protect customers’ financial information, and having a processor with the necessary security measures in place is essential for staying securely compliant. It’s important to note, that your business must also take actions to remain PCI-compliant. For example, you should never write down a customer’s credit card information on a sticky note to save for later. You might also need to have your IT team take steps to ensure your network is set up in a secure, PCI-compliant manner. A dependable PCI-compliant processor can help give you peace of mind, as you know that you have implemented proven safeguards to protect both customer and company data from fraud or theft. Investing in a PCI-compliant processor is an important step in helping keep your operations safe and secure.

In conclusion

With so many options available, it’s important to take the time to find a high-risk payment processor that is the best fit for your business. Researching your options, carefully reading the terms and conditions, and comparing fees, features, and reviews will help you make an informed decision. Ensure the processor you choose offers fraud protection, chargeback prevention, and is PCI-compliant with security measures in place.

While there are many predatory merchant processors out there, some companies have established themselves as trusted leaders in their respective industry niches. For example, the Premium Cigar Association(PCA) has partnered with Premium Tobacco Payment Processing (PTP) because it has proven itself to be a merchant processing industry leader in the Cigar & Tobacco industry. Members of the Premium Cigar Association even receive a special members-only discount of $500 for the first year they enroll with Premium Tobacco Payment Processing. Another example of an industry leader is Unity Payments, which pioneered a debit card payment processing solution for the marijuana industry. While other payment solutions for the marijuana industry are illegal or in the gray area, Unity Payments has a fully legal, 100% compliant debit card payment solution that allows customers of marijuana dispensaries to pay with a debit card the same way they would pay for groceries at the supermarket.

Finding a merchant processor that will meet your businesses’ needs and do so in a fair & equitable manner while not charging excessive and unnecessary fees and rates isn’t easy, but a bit of research will go a long way. Just because you can get signed up for a merchant processing account quickly and easily, doesn’t mean that it’s the best option for your company’s needs. Taking the time to compare services and fees will help you find an affordable and reputable payment processor that can help your business succeed.