Merchant Account Setup
Having trouble setting up a merchant account or increasing your processing volume? As online fraud increases, processors are stringent about providing merchant accounts for e-Commerce businesses. Therefore, increasing your processing volume to meet your business needs can be challenging as well.
Chargebacks and High Risk Merchants
Acquiring banks divide merchants into two categories: low risk and high risk. If you have a large number of chargebacks, acquiring banks may consider you a high risk merchant. This means that the processor is taking more of a risk by extending credit to you, and they do have a way of reducing this risk—they will hold certain percentage of your daily processing volume as reserve for a specified period of time to balance their risk. You will eventually get these reserve funds, but it will be tied up for months. Processors take this approach for all high risk businesses until you have a proven history of less than a 1% chargeback ratio.
An acquiring bank considers a business high risk if your chargeback ratio is more than 1% of your monthly transaction volume. Failure to keep the chargeback risk below 1% can lead to account termination and 100% of the reserve funds will be held to cover their risk. This makes it challenging to acquire new merchant accounts or request for a credit increase.
High Risk Industries
In addition to determining if an individual business is high or low risk, many acquiring banks consider certain industries more risky than others and may have special requirements. Here are some of the industries considered high risk:
- Health & Beauty
- Membership Programs
- Telephone Orders
If you’re in one of these industries, you may assume that there’s nothing you can do, but pay the higher fees and expect a reserve when applying for merchant accounts. You are also expected to follow all Visa/Master/American Express guidelines and keep your chargeback percentage below 1%. If you are high risk industry and are overwhelmed with chargebacks, Chargeback Gurus® can help you mitigate your risk.
Bring in the Chargeback Gurus®
Fortunately, the Chargeback Gurus® are here to help you out. We have assisted many businesses in getting their merchant accounts set up, and we can help you too. Our experts can determine which processor is going to be the right fit for your business and assist you in getting all of the paperwork together to open your account.
Why work with the Chargeback Gurus®?
If you’re having difficulty getting a merchant account due to a large number of chargebacks, we’re ready to help. We will make certain that you are in compliance with all processors, and then we’ll begin the cleanup. We’ll implement our 360 degree bulletproof solution to make certain that your business is protected from chargebacks and that you have the right processes in place to deal with them. If you don’t, we will work with you to create them.
Call us today at (866) 999 3758 or click here to get started. If your ecommerce business is considered high risk and you’re looking for more processing volume or to get new merchant accounts, talk to our Processing Expert and we can help!