Introduction
With the constant increase in the digital payments, there is an ever-increasing number of businesses that are seeing for cost-efficacious payment processing solutions. Ipso facto, there are only 19% of the consumers or customers who still prefer using cash to make payments. Besides all of that, most of the payment services and its providers provide diverse verticals, there is always some businesses that are little bit more circumspect about. And, these are the ones that most of the time belong to high-risk industries that mostly carry great risks of chargebacks and frauds. You can also see here more on, stripe prohibited businesses and know more. Moreover, if you have a business that falls into the category of high-risk, then, it is possible that you may find it difficult to learn about the right payment processor. But now the question that arises is who identifies, whether a business is at high-risk?
About High-Risk Merchant Account
Businesses that are known as high-risk will require a high-risk merchant account to accept the credit and debit card payments. A high-risk business is the one, which has great links of chargebacks and fraud. But one of the main things that you should know or the answer for the above-mentioned question is that, there is no central authority or framework in the payments industry which identifies the risk factors linked with a business. Rather every bank and payment processor have its own standards that are set. Then, there are some payment provider solutions which may state upfront that they don’t work with some kind of industries. Others are there who will know about detailed data about a business to know about some risk, depending on which their application can be accepted or denied. Finally, it goes down to payment processors internal criteria and outlook towards the management of risks.
Points That Identify Whether a Merchant is At High-Risk
Further, you will know that some industries that carry high risk may be automatically marked as a high-risk business. Some of the examples of the same are – cbd (cannabidiol), e-cigarettes, and vape, stun guns and tasers, credit repair, multilevel marketing (mlm), adult products/services, pawnshops, supplements and nutraceuticals, tech support and search engine optimization (seo) services and many. There are many other factors that are involved in terming the business as high-risk. Some can label you as high-risk, if you are a novice in your business. Or you have never processed payments before. Then, comes the poor credit records or the low credit scores or defaulting on loans. If you or your company names comes on the MATCH list, then you can be at a risk of perception. The same will go for industries that has controversial products lines or work on a legal slope that is risky.
