How Should You Set up a High-Risk Merchant Account?

Because more and more transactions are conducted through the Internet, merchants will need a payment processing system. Many customers use intermediaries or payment network aggregators, but certain online retailers also do not accept credit cards. It's not good enough!

If you are new to the e-commerce industry, you might be curious what a merchant account is. How does it work, and what are the conditions to receive it? The advantages and disadvantages that would accrue as a result of opening a merchant account? If you read this post all the way to the finish, you would undoubtedly find all of the answers.

What Do You Understand by a Merchant Account?

A merchant account is a new generation account payment system for e-commerce. It is required for a structured B2C company, even via non-resident companies in other countries. Setting up a merchant account is not only necessary for online sales; it is also required for offline selling. Merchant accounts are usually necessary for online retailers, online casinos, and online game operators.

It is no longer feasible to envision a single online company or auction without first launching a merchant account. This is the secret to the product or service's worldwide customer demand. It enables you to receive purchases from anywhere in the world at any time, independent of the financial institution's operating hours. Customers will pay at any time of day or night, even holidays, and the invoice will be received immediately and on time. Isn't it true that any entrepreneur wishes to run a company without boundaries and 24 hours a day, seven days a week?

Merchant accounts are divided into two classifications:

Low risk.
High risk.

How Do Banks Assess the Extent of Risk?

To put it simply, an organization is called high-risk if certain conditions are met:

A startup company.
Risky market (with high chargeback probabilities). The chargebacks911 data, for example, gives you the overall chargeback rate for a particular market.

As the chargeback percentage reaches 1%, merchants face increased transaction fees.

The corporation is experiencing financial problems.
Companies with a poor credit rating. The firm provides products and services to high-risk nations (Iran, The Bahamas, Myanmar, Jamaica, etc.)
Untrustworthy products and facilities.
The director of the firm presented misleading statements regarding the company's operations and legal identity.
The declared behavior is not reflected in financial transactions.

All banks, especially international banks, constantly track the actions of businesses to ensure that the provisions of the negotiated contract for serving a corporate account are met. It is the importance of conformity with all terms of the contractual document that helps you to remove the bank's credibility and running costs, as well as the breach of the processing transaction system and its obstacles.

Why is it set up this way? It is simple to explain: the bank is capable of covering the highest risk of payment collection. We would like to point out that the selection of risky firms is not exhaustive. For eg, the business might be in a banned sector, but this does not exclude you from opening an account in the payment system.

Imagine you sold knowledge modules on the web platform X to support entrepreneurs launching their businesses. You are legally in the area of online auctions in this case, but in fact such an activity cannot be applied to an online auction if the offering (knowledge modules) is demarcated for your platform.

What Can You Anticipate After You Open a High-Risk Account?

If you have successfully opened an account with a payment system, keep in mind that the ability to receive money comes at a cost. As a result, the cost for a high-risk company that requires a financial instrument would be far higher in several ways:

Expensive Fees

Fees for financial service companies that work in high-risk businesses are typically larger. However, with Myuser you get what you pay for! The fee of 1-3% that you pay to Myuser act like an insurance for your funds so that your funds are not frozen without any notice which a lot of other payment processors have a habit of doing so often for drop-shipping and replica selling businesses. So, find your safety net first with Myuser before making an abrupt decision.

Fraudsters

There are dishonest firms whose aim is to locate a legitimate organization with a large degree of danger, provide help "at a low cost," and then suddenly vanish after sealing the agreement with a strong contract and receiving funds. Until initiating a payment system account, ensure that the payment processor is really trustworthy. It has been in the industry for more than a year, and has a strong reputation. Even respectable payment processing companies, such as Stripe, cause issues. They can, for example, freeze your funds or close your high-risk merchant account without warning or reason.

On the other hand, if you are a legitimate user, Myuser will give you the customer support you might be seeking for to scale up your high-risk business. Focus on growth and level up with Myuser!

Approval Difficulties

When you try to open a high-risk merchant account, you might face difficulties in terms of approval. For example, banks might ask for tons of documents which can be time-consuming for you. Ultimately, banks are the one who decides whom to accept. Banks make the end decision based on old traditional methods. All of the high-risk merchant accounts are dependent on Banks' decisions. However, Myuser takes judgement into its own hands based on modern underwriting and it is not associated with any bank. Myuser is not a merchant account provider but rather it is a network. It works way better than high-risk merchant accounts and it is the only high risk processor that isn’t affiliated with banks.

Choosing a High-Risk Payment Processor

Before reaching a definitive judgment, there are some requirements to address, which might include the following:

The payment system's expertise and prestige.
The right to negotiate an agreement online, the specifications for a legal body, the store page, the conditions of communication, and the operation.
The subscription cost, as well as the number of reductions on each sale (which is normally calculated by the seller's revenue).
Accepting reimbursement from many different sources.
Processing of refunds, checkout operation, and so on.
Characteristics of the merchant's account ( invoicing, management, etc.).
Professional service specialists of a high degree of qualification. It is the last and most significant aspect to remember when evaluating a high-risk payment processor. A member of the support team must answer not only immediately, but also concisely.

Myuser, for instance, is the first payment gateway for high-risk businesses that doesn't freeze funds for legitimate users without any specific reason or notification. Myuser helps to minimize dispute rates because it gives you the same abilities as Amazon to handle disputes from your own Dispute Resolution Center without requiring customers to go to the bank.

With Myuser, you don’t have to worry about gridlock of funds out of the blue. As one of the best payment gateway systems, you get top-notch customer support around the clock. Not only this, you get instant payouts after showing relevant history! When you join and pay 0.25% fee, you receive instant payouts with the inclusion of a credit card we provide to you. With this method, you can get your funds faster and re-invest smartly.

Bottomline

High risk merchant accounts put a lot of reserves, around 10% and it molds a threshold on how much you can transact monthly! That’s just unacceptable as a merchant, don’t you think? You are dictated by how much money you can make. Hence, you cannot grow fast, or you will be blocked without any justification. You are unable to transact more than the limit imposed or you might carry the burden of getting blocked. However, Myuser doesn't have a monthly limit implication and it let's you focus on high growth without any issue. Payment processing services dislike fast-growing businesses and their underwriting is not structured to benefit those companies. With Myuser, however, we help high-growth businesses by instantly underwriting the company every hour in an automated way.

If you have never created a merchant account previously, you may run into a number of issues that will consume a significant amount of your time. To make things easy and simple, it is preferable to approach experts who have prior experience providing such similar services digitally. Our specialists at Myuser are ready to facilitate you in every step of your high-risk business.