High-Risk Merchant Account Underwriting: What To Expect From The ProcessPosted by Brian Latch on December 3rd, 2021 Merchant accounts are essential for pretty much any business you name if you want to be able to accept online and credit card payments. But if your business is tagged as high-risk, you need high-risk merchant accounts instead because the risks involved in these kinds of businesses are higher. However, when you get in touch with high-risk merchant services, you will come across the term risk underwriting. But what does it mean? Underwriting is a process that your merchant account provider has in place to scrutinize or vet you before agreeing to open your high-risk merchant account. When you are looking for a high-risk payment gateway or merchant service provider, you need to be prepared for the process. Here is what the processor would want to review.
Processors and underwriters often think that some businesses are riskier to do business with than others. Businesses with ambiguous services or products are more enormously scrutinized than businesses with concrete services. Certain candidates may get rejected.
If you have been in the business for more than five years and have a stable cash flow, it leaves a positive impression on the underwriters. It also indicates that the business in question is legitimate.
If you have used a merchant account in the past, the processor may want to go through your chargeback history. If your old merchant account has too many chargebacks, it may cause a hurdle to you in the present.
Underwriters also ask whether you bill your customers in advance or after the services are rendered. According to some, if you bill your customer in advance, the chances of chargebacks are increased.
Your credit score plays a huge role in deciding whether you are worthy of their services. Do keep these pointers in mind the next time you are looking for high-risk merchant services or a payment gateway online. Like it? Share it! More by this author |