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Any business can process a “high volume” amount of sales. The main denominator for that comes mainly from experience and the business’ age. But this isn’t always the case, sometimes the business itself has high volume without it being aged. Now, this is a good thing, but for new business owners handling something of this caliber, it can be overwhelming. What is the best way to structure a business like this? How can you maintain growth while not also growing too fast to keep up? Will I be able to support the amount of work that goes into a high-volume business? Who can I turn to to help me support this? Well, these answers will often depend on the industry that you are functioning in. But don’t worry, there are solutions for you. Find out the common high-volume business types and ways to reduce their risk.
What Makes Your Business High Volume?
First, we must understand what makes your business fall into the high volume realm. And it can really be one of two options that does this:
- You have large single transactions
- You have a bunch of smaller transactions
Now, either way, you are processing a higher volume of payments through your business’s online payment gateway or virtual payment terminal. While the monthly amount processed depends on the industry type, it is most often above the tens of thousands each month.
When businesses begin accepting credit and debit card transactions, they are given a monthly volume cap. This cap is determined by the bank on a number of factors and is in place to help reduce merchant services fraud. But in cases of high volume accounts, this cap is often exceeded. Because of this, banks and credit card processing companies are leery of high volume business because of the higher chance of fraud and either place holds on the exceeded amount or do not accept the account in the first place. Getting that volume raised is possible with steady growth and plenty of processing history, but is much harder for a new business.
Being able to reduce your risk to the bank and work with them to find a way to continue processing all of your sales is of the utmost importance to any growing business.
Common High Volume Single-Transaction Businesses
- Property Management
- Vehicle Sales
- Vacation Planning
- High-end Retail Merchants
- Bail Bonds
These high-volume businesses commonly see large single transactions in the thousands or more on a regular basis. Meaning that either the items being purchased are expensive or need to be paid in a lump sum.
While this may be typical for the items that you’re selling, a new business with high single transactions is much more risk to the supporting bank than a smaller transaction business. This is because if an issue arises, there is more invested in the transaction than simply pocket change. Higher stakes lead to higher expectations and higher risk.
Chargebacks are an Issue
Leading back to expectations surrounding a transaction of this type; A sale of this caliber comes with an assumption of quality. The item has to be worth the amount spent on it. But if it isn’t, the customer has a much higher chance of authorizing a chargeback. This process is brought to the attention of the customer’s bank when they want to get their money back for purchase without reaching out to the seller. Oftentimes, the customer claims that the transaction is fraudulent, but sometimes this happens with an unresponsive seller.
If you have a customer reach out to you after making a large sale, and they are requesting assistance or a refund, it is in your best interest to communicate with them and try to find a resolution. Even if this resolution ends with you giving a full refund, that is much better than facing a chargeback on your account. When a chargeback is tagged to your business, even if it is unfounded and fraudulent, you will still be penalized. Banks don’t want to deal with it and your merchant account may be temporarily or permanently closed while an investigation is being done.
Don’t let this happen to you. Communicate with your customers and find ways to reduce your risk of chargebacks to your account.
Common High Volume Cumulative-Transaction Businesses
Businesses in this space sell a large number of items, even if those items don’t cost much to the customer. So at the end of the day, a high volume business of this type could see the same amount or more of total transaction amounts on their account as the large single-transaction businesses. Again, this monthly cap is determined by the banks and processors that get you approved.
With any business comes the possibility of chargebacks, but with businesses in high volume cumulative transactions, these are not as common of an issue. This is because the percentage of chargebacks is what is used to determine if an account needs to be paused or shut down. But because of the high amount of different transactions, the percentage is often diluted enough to become less of an issue long-term. For these businesses, the real risk is the high possibility of fraud.
Fraud is an Issue
Customers and business owners alike find it easy to enact fraud over the internet. It is harder to track and easier to perform. And with a high-volume account covering up fraud, it is a simple way to get lost in the shuffle. Well, banks know this as well as anyone else. They strive to find ways of reducing fraud while still allowing legitimate businesses to proceed.
Unfortunately, if your business is high volume, it is also high risk and will be scrutinized more closely to find fraud… even if there isn’t any.
Stay vigilant and implement simple ways of vetting your customers in order to prevent fraud on your merchant account for high volume. This can be supported by your high-risk payment gateway provider or through your supporting bank.
Securing Your Payment Processing Solution
In order to not only get your business going but also scale effectively, you will need a high-risk merchant account. This type of credit card processing account will allow you to have a more flexible monthly volume limit, an easier time staying PCI compliant and safe, and also reduce your merchant services fraud. By finding a partner that can support you, you will find that running a high-volume business is much easier.
Be sure to look for high-risk payment processors that:
- Has proven to support high volume businesses
- Can also handle your industry type (i.e. Property Management, Continuity, etc.)
- Will implement a secure online payment gateway
- Strives to fight for your business in the case of something gone wrong (i.e. holding funds, superfluous fees, etc.)
Don’t settle for anything less than the best merchant services provider that you can find. It is more than worth it in the long run for you and your high-volume business.