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First of all congratulations to all of the business owners that process a high volume of transactions. That means that you are well on your way to financial success, if not already. Whether you built up this business from smaller transactions or you deal with high priced items, you have found yourself in the high volume category. Unfortunately, if a large percentage of your transactions are on credit cards, you also fall into the high risk category. This just means that your business poses more risk factors to your supporting payment processor and bank. But why does more success mean more risk? Let’s find out.
High Volume Businesses
When signing up with a payment processor to set up a merchant account for your business, they often set a volume cap and transaction limit. This amount depends on a bunch of risk factors pertaining to your business. These limits are in place to help prevent fraud against the bank. So, if your account begins to process more than typical monthly volume transactions, the bank begins to look into your business. The same goes for if your average single transaction amount is exceeded.
If you consistently process more than the agreed-upon limits, you will have a few things happen to your account:
- Your funds will be placed on a hold.
- Your account will be suspended.
This will happen until the bank raises your limits or ends your merchant account contract. The reason that the banks are so protective of an account processing more than usual is because of fraud. Many scammers set up an account and run a large amount of charges on stolen credit cards. After this happens, they often close the account and let the banks deal with the chargebacks that have occurred.
Banks keep this in the back of their minds whenever a business begins processing high volume merchant account transactions. In order to help prevent the suspensions and holds, getting a high risk merchant account will be required.
Common High Volume Industry Types
There are a few business types that run into high volume account issues such as:
- Property Management
- Subscriptions and Recurring Billing
- Digital Downloads
- Electronics Accessories
Businesses working in these spaces either process hundreds of small transactions every day or large lump-sum transactions each month. And since most businesses nowadays process their payments through a virtual payment terminal or payment gateway, credit card processing capability is imperative.
Merchant Account for High Volume
With a high risk merchant account, your high volume business will be equipped with more flexibility and fewer possibilities for risk. You will also receive more protective security measures. Implementing a verification process will be step one with a high risk payment gateway. This way you and the bank can be sure that every transaction is a certifiable one. With this extra step in place not only does it stave of fraud, but it also helps to prevent chargebacks.
High risk merchant account verification helps with chargeback protection because of the customer acknowledgment for the purchase. If a consumer says that they don’t recognize the charge, but you have information that says that they were aware, it will help prevent that chargeback from going through. By mitigating the risk of chargebacks, your account will be so much healthier long term.
Keep in mind that not all high risk merchant accounts can support high volume accounts. Many payment processors have industry types that they are especially good at. In some cases, the merchant account provider is in the high risk space but cannot take high volume businesses. The reason for this is because of their banking relationships.
High Risk Banking Relationships
Just because a payment processor is high risk does not mean that they have a banking partnership with all types of high risk business types. Some processors are good at getting the adult industry processing, but cannot take credit repair businesses. Because of this, it is important to pair up with a processor and bank that can handle high volume.
Obtain a Secure Merchant Account
The first step to securing an account is to find a payment gateway provider that can support you. Be candid with your payment processor and tell them your expectations for processing. Then be sure to ask questions that help you get to know and trust them. Once they have your trust, prepare to fill out their application.
The merchant account application basically gets all of your account information together for the banks willing to take you on. They will want to see your previous processing history (if any), social security number, color copy of your ID card, and the bank account information you will use for deposits. With all of this information and your website in hand they will do a complete prevet of your potential account. They will look at the risk factors that you pose and how they will choose to mitigate them. This may start with a monthly maximum or a side account in case something bad happens. Fortunately, with the right bank, you will not have to deal with these for long. The better they know you, the more flexibility you will get.
Make sure that you take advantage of the risk mitigation aspects of your account. Set up an auto verification service and any credit card fraud prevention for merchants that they offer.
You may not be blessed with a high volume account right off the bat. But will persistence, patience, and proof you will get what you need. Banks and payment processors have fail safes in place for their protection and yours. But by continuing to build a relationship with them, they will soon see that you are capable of handling more and your business will thrive because of it.