You might have noticed that the so-called best merchant service providers charge different rates based on whether the business is considered a low risk merchant or a high risk merchant. If you are facing the problem of finding a trusted payment gateway for your high risk businesses, then you have come to the right place. This blog will show you how to save money when setting up a high risk merchant account.
Low-Risk Merchant Account vs. High-Risk Merchant Account
Below are five categories that payment processing companies use to categorize high-risk merchants:
- If the industry you are operating in has a high chargeback ratio.
- You are in the business of handling a major rate of fraud
- Lack of financial stability
- You have poor credit as a merchant
- You sell restricted products or services (CBD, Credit Repair, Adult, etc.)
On the contrary, payment processing companies will categorize you as a low-risk merchant if:
- Your company or organization is bringing less than $20000 per month
- The average ticket size for your business is around $50 or less
- There is a very low or zero chargeback ratio in the industry in which you operate
- You are operating in a low-risk industry
Now that you have a general understanding of the difference between a high risk merchant account and a low risk merchant account, you can now start the process of finding a company that can meet your needs. While you are searching for a merchant provider, you want to learn how to avoid high risk merchant fees.
3 High Risk Merchant Fees To Avoid
If you have a high-risk merchant account, then there are some additional expenses that you have to pay. For instance here are some of the fees below:
- Setup Fees
Most high risk merchant companies charge a small setup fee to get started.
- Capturing Fees
In order to provide a payment gateway for high risk businesses, merchant service providers can charge between 3% to 6% for qualified rates. Always shop around for the best rates.
- Card Processing Fees
Most high risk merchant services providers charge a fixed monthly fee for the process coupled with a value for each sale. You should expect around 10 percent of your sales in credit card processing fees; however, it can vary according to industry.
If you want to avoid as many fees as possible, one option for high risk merchants is the cashless ATM machine, which is explained in detail below.
What Are Cashless ATM Machines
Cashless ATM machines are similar to standard credit card processing machines. The only difference is that they do not dispense cash. The machine prints a receipt which customers can give the merchant to make the payment for their goods and services. The most important benefit is that the cashless ATM helps you reduce customer chargebacks, since they have to enter a 4-digit pin to complete the transaction.
Putting It All Together
When you add a cashless ATM machine to your high-risk business, not only do you save money, but you are also able to generate additional revenue. Moreover, the customer is responsible to pay the entire transaction fee, and you as the merchant only have to pay a small fee of $2.50 per month for the maintenance of your cashless ATM machine. So if you are looking to set up a high risk merchant account, then reachout to the team at My Payment Solutions USA today to discuss your options of getting a cashless ATM machine for your business.
