What is a high-risk merchant account instant approval?

Accounts Wizard
September 15, 2020

When evaluating payment processors, it is important to understand that individual document requirements, approval criteria, and turnaround time vary among providers. For high-risk merchants, instant approval generally takes 3 to 5 days to be up and running, but can extend beyond that. New accounts typically undergo a 2-step approval process. The merchant account provider and the bank or back-end processor that underwrites the account and processes transactions must both approve. To expedite the approval process, we offer the following recommendations.

Factors That Can Delay Instant Approval For Your High-Risk Merchant Account

High Chargeback Rates. Banks and merchant account providers consider any merchant with .5% or more in chargebacks to be a high-risk merchant.

High Volume and Transaction Levels. Payment processing partners are often wary of online businesses with high monthly processing volumes and/or high ticket transactions.

International Businesses. Merchant account providers are often cautious about signing up businesses that transact internationally due to heightened fraud risk exposure.

Bad Credit and Financials. High-risk merchants often must maintain account reserves equal to a percentage of revenue, based on credit score and other financial criteria.

Business or Industry Type. For example, businesses in the travel industry are high-risk because of frequent cancellations. They usually end up with a number of refunds and customers who file chargebacks. Some other high-risk business/industry types include gambling, forex trading, adult-themed websites, and more.

How To Improve Your Chances of Getting Instant Approval For a High-Risk Merchant Account

While requirements for individual providers may vary, the following tips can increase the possibility of getting approved in as little time as possible. Prepare to share confidential information about your business, including history, bank and financial statements, current and projected processing volumes, chargeback rates and more.

Partner with a specialist. Not all merchant account providers offer high-risk merchant accounts. Select a provider who specializes in working with merchants whose businesses are considered high-risk.

Be honest. Do not attempt to hide information about your business type, credit card processing history or TMF/MATCHlist placement due to past actions. Be transparent and provide an explanation when necessary, especially if the situation has changed.

Have your paperwork ready. To qualify for a high-risk merchant account, your prospective provider will need to review 3 to 6 months of bank statements, plus other essential paperwork that will validate your business.

Clean up your credit score. The higher your credit score, the better your chances of receiving instant approval for your high-risk merchant account. Take the time to review your credit score and continue to make timely payments to clean up your balance sheet.

Strengthen your balance sheet. High-risk merchant accounts often require that a percentage of revenue be placed on hold to account for potential chargebacks. You will need to allocate adequate savings from business cash flow to sustain required reserves.

Update your eCommerce website. Periodically test and update your ecommerce website to reflect accurate information and ensure seamless interaction, especially on checkout pages where errors can trigger false chargebacks.

What Questions to Ask When Selecting a High-Risk Merchant Account Provider

When selecting a high-risk merchant account provider, ask the following questions to help determine which provider is most suitable for your business needs.

  • Timely Approval. Can they truly offer instant approval for your high-risk merchant account?
  • Industry Expertise. Do they have experience in your particular business type or industry category?
  • Fees and Penalties. Do they offer low processing rates? What fees or penalties are applicable for cancellation, early termination or chargebacks?
  • Integration Support. Do they have experience integrating payments into your preferred shopping cart?
  • Fighting Chargebacks. Do they offer automated, online tools to help your business dispute chargebacks in a timely and cost-effective manner?
  • Personalized Approach. Are they willing to adjust solutions to match your revenue volume, chargeback and reserve policy needs as your business scales?

WizoPay is here for high-risk merchants. Apply today for instant approval.


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