How to Get A High-Risk Merchant Account for Automotive Business?
We know what a high-risk merchant account is, but is it good for a business to be declared high-risk? Further, do businesses aspire to get a high-risk merchant account? Some industries are labeled as high risk, and associated with them or working in them can allow the payment processors to term your business as high risk. On the other hand, some businesses wish to get a high-risk merchant account. So here, we will see what conditions make a merchant account high risk and how an automotive business can get a high-risk payment process highriskpay.com.
A Merchant Account is a type of account held in the name of a business. It allows the business to make and accept payments in electronic card transactions. They help expand the reach of a business in many ways. However, due to unavoidable circumstances, your business becomes prone to higher risks of fraudulent activities, chargebacks, or high volumes of returns. By being labeled as a high-risk merchant account, such a business has to pay higher processing fees to the Merchant Account Providers for the higher risk they are taking in maintaining and managing the account.
There are many reasons a merchant account may get labeled as high risk. Some of the reasons are:
- The business may be new;
- The business merchant has not processed payments before;
- That may be the industry in which the business is, is usually considered high risk and has a likelihood of higher numbers of fraud.
Since a merchant platform takes higher risks in managing the transactions of a high-risk merchant account, a high-risk business will have to pay higher processing fees to the merchant platform providing the services. Although no fixed parameters exist, the fees levied on a high-risk merchant account are usually double that of a low-risk merchant account or sometimes even more.
How Do High-risk Merchant Accounts Come To Be?
There are many reasons a business’ merchant account may be labeled as a high-risk Merchant Account by the payment processor. Here are a few reasons why a merchant account may be labeled as high risk:
- High transaction volume: if the merchant account carries high volumes of transactions or has a higher average transaction rate, it may be labeled high risk.
- Accepting international payments: if the business sells its products to other countries labeled as high-risk countries with high risks of fraudulent activities, then the merchant account may be termed high risk.
- New merchant: if the merchant is unique and has no experience processing payments before, his account may be labeled high risk.
- High-risk industry: if the industry in which the merchant carries on his business is a high risk, then his merchant account may also be considered high risk.
- Low credit score: if the merchant has a low credit score, then his merchant account may be termed to be high risk.
How To Get A High-risk Merchant Account For The Automotive Business?
Automotive businesses are industries involved in manufacturing motor vehicles and their components, including providing other services related to motor vehicles. An automotive merchant account is considered high risk. Usually, in some industries, the status of being “high risk” comes with the types of items that a merchant sells. Even if an automotive company conducts a legit organization and pays its bills on time, it will be considered high risk since the automotive industry is labeled high risk. Some of the reasons are that people may be selling fake parts, poor quality parts, and poor customer service.
However, if an automotive business does need a legit status of being high risk, then they need to find a suitable payment partner that can handle their high-risk merchant account. The automotive business will have to be honest and share all the information with the payment partner to enable it to make a sound decision. The automotive merchant will have to prepare all the documents and show they are liable to higher chargebacks. Further, they will have to convince the payment processor that their industry itself is considered a high-risk industry. Further details showing any of the reasons mentioned above as to how a merchant account becomes high risk can help the automotive business get a high-risk merchant account.
Read More: How to Integrate Payment Gateway into Mobile Apps Making No Mistakes
Conclusion
We have seen that for an automotive business to get a high-risk merchant account; it will have to show to the payment processors that they are in an industry that is itself considered as high risk and that they fulfill the other conditions and requirements, as stipulated in this paper, that qualifies them to get a high-risk merchant account. Since the automotive industry is considered high-risk, it will not be difficult for an automotive business to get a high-risk merchant account. However, an automotive merchant may have to prove a few things to his payment processor to get labeled a high risk.
Mahesh Kumar is a dynamic marketing consultant and tech enthusiast with a passion for driving business growth through his innovative strategies and cutting-edge technology. With 6 years of experience in the industry, he has helped numerous businesses leverage the power of digital marketing to reach their target audience, build brand awareness, and increase sales.
