What Would Make My Business “High-Risk?”
What makes a business high risk? If you’ve been classified as a high-risk business or a high risk merchant, and you’re not sure why, there are multiple reasons why you might be classified under this label. The most important thing to remember is that it’s not the end of the world. You can still find a merchant account provider! But if you want to find out why you’re classified as a high risk business, check out the reasons below.
What Makes A Business High Risk?
High Risk Business Types
Some businesses are considered high-risk just by grace of what they do. If your business is similar to models with questionable legality, it’s a sure bet that you’ll be considered high risk. Common examples of these include:
- Adult/Pornographic Websites and Products
- Gun and Firearm Sales
- Custom Jewelry Sales
- Detective Services
- Online Dating
- Online Gambling
- Car Rentals
- Cell Phone Sales
- Collection Agencies
- Hair Restoration
- Weight Loss Centers
- Telemarketing Call Centers
- Pawn Shops
- Meat Lockers
- Escort Services
No Transaction History
It’s the chicken or the egg problem- you need a merchant account to have reputable history, but to get a merchant account, you need a reputable history! Luckily, there are many merchant service providers out there that take this into account and look at the whole of your business, and don’t immediately disqualify you because of your lack of transaction history. Having a good record is the best, but having no record is still better than having a bad record.
Bad Credit Score
Depending on the type of your business and how it’s registered legally, the business credit score or the business owner’s credit score may be taken into account when your application is being processed. Of course, having a good credit score makes everything easier. But if you’re classified as high risk, and you have a bad credit score, that’s probably one reason why.
If you’re a small or new business and you deal with lots of orders either online or a high quantity of sales internationally, that’s another flag that might go up in the application process for your merchant service account. International sales open up a bigger can of worms than national orders and may be harder to regulate and enforce correctly.
What Do I Do If My Business Is High Risk?
Don’t fear, you still have plenty of options. It won’t be quite as easy to snag a profitable merchant services account, but it’s still in the realm of possibility. Remember that even a denial usually means “come back after you have more transaction history or a better credit score,” so don’t fret. That’s what makes a business high risk, and you can take steps to make your application go through more smoothly.
If you’re interested in a high risk merchant services account, call us today at 1-800-930-4476. We may be able to set you up right away!