When it comes to the risk you pose for business accounts and payment processors, there are some that make your business stand out. Here are the ones that could identify your business as a greater risk:
Businesses That Never See the Card
This includes online businesses, home-based businesses, online dating sites, online auctions, and a variety of other businesses run on the world wide web. Even businesses that offer real products but manage payments for products online.
Reputation for Abundant Chargebacks
If you have encountered many chargebacks in the past, you may find that you have been identified as high due to checkout errors, a bad product line, or other possible reasons. You can put the merchant account at risk and need to work a little harder to prove yourself in the future.
Industry, Location and Customer Profile
Some industries pose a greater risk than others. Some are based on the nature of the business, others are based solely on the reputation of the business. For example, stores that offer adult products are likely to be rated as high-risk businesses as well as those dealing with firearms. The same goes for travel services, telemarketers, bail bonds, online auctions, and dating websites.
The higher the risk associated with your industry, the higher the fees and charges for credit card processing.
Various factors define the risk associated to your business like Industry, Location, Processing History, Processing volumes and Clientele. For instance, stores that offer adult products are just as likely to be rated as high risk enterprises as those who deal firearms. The same holds true for travel services, telemarketers, bail bonds businesses, online auctions, and dating websites.
Businesses that are placed in the Terminated Merchant File (TMF), also sometimes called the MATCH list, will also be considered high risk.
Keeping in mind that the actual rates and fees you’ll pay depend on a number of factors, high risk businesses should expect credit card processing fees to start around 3.5% for an established business in a “less risky” high risk category. From there, costs can rise to 10% or more, with the highest rates coming for those in the riskiest industries or businesses using “offshore” merchant service providers.
If you opt for an offshore payment processing solution, there may be a cost associated for new company incorporation in the country where your processing bank is based or setting up a new bank account. Many times the acquiring banks want collaterals or security deposits which may be a percentage of your monthly or yearly processing volumes.
When you open a seller account, you're assigned a seller category code (MCC) that classifies your business. Many businesses ask if there is a list of high risk MCCs. While there is no single definitive list, each of the high-risk processors will keep their own list of jobs that they consider high-risk. When evaluating processors, you can directly ask if they will support your business type before filling out an application. You don't need to know your current (or expected) MCC before opening a seller account; Your processor will assign this to you.
However, Visa and Mastercard publish MCC lists that they classify as high risk. American Express and Discover do not publish lists but provide other information.
Visa requires registration for the high risk MCCs mentioned above. Before you can accept Visa cards, your processor will need to register you as a high risk business. Visa charges the processor for registration, but the processor will transfer this cost to you.
If you choose to acquire both Visa and Mastercard and have an MCC account that requires card brand registration, you will pay $ 1,000 per year to register with both companies. This registration fee is not under your processor's control, and in addition to the per transaction rates and fees, the Processors will review the details of your individual needs and set pricing and conditions for a job on a case-by-case basis.
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We are not a Payment Processing Company. We are Sales Partners of multiple national and international payment processing companies and acquiring banks.
Our Job is to assist merchants in finding payment solutions and set businesses up to accept all major credit cards and alternative payments.
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Lot Payments LLC is a company registered under the laws of St. Vincent & Grenadines. The company is also the Financial Services Authority of SVG Registered. Lot Payments LLC, Lot Payments OÜ are all part of Lot Payments Group. Lot Payments is the trading name of Lot Payments Group.