Introduction to High Risk Merchant Accounts
High risk merchant accounts are essential for businesses operating in industries considered high risk by payment processors. These accounts are necessary when:
Your aggregate merchant account has been shut off by popular payment processors like PayPal, Stripe, or Square.
Your business is in a high risk payment processing industry.
While high risk merchant account fees are unavoidable, they are necessary for profitability in online or in-store sales for high-risk businesses.
Dedicated vs. Aggregate Merchant Accounts
Dedicated high risk merchant accounts differ from aggregate accounts in two key ways:
Set up specifically for your business, requiring a longer underwriting process.
Carry additional fees that may initially appear daunting to merchants unfamiliar with high-risk payment processing.
Credit Card Processing Fees: A Breakdown
Credit card processing fees for high-risk merchants include:
Non-negotiable base fees:
- Interchange rates
- Assessments charged by issuing banks (Visa, Mastercard, Discover, etc.)
Negotiable markup rates:
- Interchange plus
- Tiered and bundled rates (vary based on processing method and chargeback risk)
High risk merchant account specific fees:
- Set-up fees
- Capture fees (for swipe terminals or high risk payment gateways)
- Processing fees (fixed monthly fees based on processing volumes and sales)
- Penalty fees (from consumer chargebacks)
Managing High Risk Merchant Account Fees
While it's impossible to avoid high risk merchant account fees entirely, you can minimize their impact:
Seek payment processing solutions from experts who can negotiate the best rates.
Work with providers who understand your specific industry risks.
Look for providers with in-house underwriting staff for transparency regarding fees.
Conclusion
High risk merchant account fees are a necessary cost for businesses in high-risk industries. However, by working with experienced payment processors like PayKings, who have relationships with multiple acquiring banks and understand various high-risk industries, you can minimize unnecessary fees and ensure smooth, uninterrupted payment processing for your business.
For businesses needing a high risk merchant account without unnecessary fees, consider applying for a free quote from a specialized provider. This can help you understand the specific costs associated with your business type and find the most cost-effective solution for your payment processing needs.