High Risk Credit Card Processing for ISO Merchant Agents

Business owners that are in industries labeled as high risk can have a hard time getting a merchant account approved. Banks and other financial institutions often deny these merchants to avoid the fraud claims, the charge-backs and other things associated with high risk credit card processing. But this reality hasn’t affected the growth year after … Continue reading “High Risk Credit Card Processing for ISO Merchant Agents”

Business owners that are in industries labeled as high risk can have a hard time getting a merchant account approved. Banks and other financial institutions often deny these merchants to avoid the fraud claims, the charge-backs and other things associated with high risk credit card processing. But this reality hasn’t affected the growth year after year of online businesses, adult related stores and over-the-phone merchants. Accepting credit cards is a matter of life and death for millions of entrepreneurs across America and the world. This market is demanding an opportunity to be trusted with credit card processing capabilities, and itself is a big opportunity for ISO Merchant Agents.

Targeting the High Risk Market

ISO Agents have to reach out to these businesses: Adult Websites, Online Pharmacies, Online Casinos, Loan Modification, Debt Collection Agencies, Online Dating Websites, Travel Agencies, Escort Services, Membership Clubs, Vitamin and Herbal Supplements, etc. Most of the business owners of these type of companies may being looking for an affordable credit card processing solution. If the ISO Merchant Agent can offer a high risk merchant account that is cheaper, easier, more flexible or all of the above compared to the one currently in use by the merchant, they have made a new sale and hopefully a long term client.

Becoming an Expert in High Risk Processing

ISO Merchant Agents need to learn all the options available to merchants, including offshore credit card processing. The idea of having a merchant account with a financial institution overseas may sound dangerous for a business owner that is not well informed in the matter. ISO Agents need to know everything about gateways, shopping carts and the software involved in online credit card processing. Internet merchant accounts use these virtual processing tools the same way a retail merchant account would use physical processing equipment, like credit card machines, etc.

A Partner with Experience in the High Risk Market

Not every Merchant Account Provider has the necessary experience and infrastructure to deal with the specific demands of high-risk businesses. An ISO Merchant Agent needs to be sure that once the merchant becomes a client, all his needs will be satisfied with a high level of expertise. The technical staff and the client service representatives have to be able to resolve issues and to respond questions related to non-present processing systems, charge-backs, fraud claims, etc.

Wrapping up

High Risk Merchant Accounts are a profitable financial product that every ISO Merchant Agent should offer. It is true that the competition has grown and more organizations are targeting this market but even in the current recession hundreds of new online business and other high-risk merchants have appeared. Take the time to master the specific information, partner with the right credit card processor and reach out to these businesses with a fair offer. Every ISO following these steps would be a competitive Merchant Agent in this exciting High Risk Processing Market.

Merchant Account Credit Card – A Quick and Easy Solution

A merchant account credit card can be any card that is accepted by a merchant account using a transaction process. Depending on the merchant account different cards are accepted. Some of the most common cards accepted are:

o Visa

o MasterCard

o Discover

o American Express

o Approved Debit Cards

When deciding what card to go with it is best to ask yourself these questions. What benefit does the card offer your company? Is the card completely reliable and safe? What are the rates and fees, can my company afford it? The most important question is concerning safety as the situation can turn disastrous quickly if security becomes an issue.

Security is very important as when your business which merchant account credit card to use they should specifically ask for fraud protection. Other things to look for while making sure the security and reliability are there. Is there CVV2/CVC2 acceptance, real time processing, address verification, and SSL capability?

Fraud protection protects the consumer. Credit cards have systems put into place to ensure the consumer’s safety which can neglect the merchant. A merchant must do their best to limit the number of fraudulent transactions as well as any chargeback disputes. The CVV2/CVC2 security feature is commonly used by VISA and MasterCard. These codes are a great way to prevent fraud as they provide the merchant with a code in the transaction that verifies the purchaser.

After establishing security the company must look at the fees associated with the card. An overabundance of fees can bury a company’s chances at success. If the burden of paying the fees outweighs the benefits of processing the merchant account credit card then that card is not a viable option.

These fees are different from card to card but some of the more common instances are:

o Gateway Fees

o Statement Fees

o Transaction Fees

o Address Verification Fees

o Other Monthly Fees

The amounts of each of these fees will vary according to when the merchant signs up and what card is used. A merchant credit card account will charge some or even all of these but your company should decide which card(s) suite them best by being trustworthy, reliable, and affordable. Simply overpaying for fees for a card that does not meet the standards of your company is not smart business.

After determining which cards to process a business might want to look for these things when setting up merchant accounts. Be sure to check out the bank that will issue the merchant credit card account, what clearinghouse is that bank using, what hardware/software gateways are needed, and is there a merchant credit card broker (not necessary but helpful).

Now that you have set up your businesses merchant account credit card your company can begin accepting payments with your new merchant account. The process of swiping the card and completing the transaction is based on the assumption that the company will fulfill their obligation to the customer after the transaction is registered and the funds have been transferred.

Reduce Your Merchant Credit Card Processing Fees

Nothing is worse than finding out that your merchant credit card processing fees are cutting into your bottom line even more than you expected. If you didn’t sit down and do the math before you signed your merchant account contract, the total may come as a bit of a shock. Even so, there are ways you can trim some of those losses, if you know what to do.

Consider Minimum Purchases

While neither Visa nor MasterCard can impose minimum purchases, it isn’t against any rules for you to suggest them to your customers. You can’t force your customers to purchase more, and in fact it is a really bad idea to try, but it may encourage them to spend a bit more and that will reduce the amount you pay per transaction, at least by percentage.

Offer a Discount for Cash Purchases

When your customers pay in cash, you don’t have to pay any transaction fees to your merchant account provider. While it isn’t always practical to do business in cash, it can provide a real incentive for those individuals sitting on the fence about a big purchase.

Ask for Lower Fees

If you find that your fees are really affecting your profits, call your merchant account provider and ask if they will decrease them a bit. Everyone is struggling in this economic climate and it never hurts to ask. Even a small change can make a big difference at the end of the month.

Raise Your Rates

As long as your prices remain competitive you can consider raising prices by a percentage point or two. That will cover your expenses on credit card purchases and since you raise prices across the board, might even create a significant improvement in your bottom line. Of course, the risk is that if you raise your rates you might lose customers as well.

Look Elsewhere

When your contract is coming to an end, take the time to shop around. Look at offers from at least three different providers and sign with the one that offers you the best terms for the kind of business you are running.

Merchant credit card processing fees can really take a bite out of your income. Keeping those fees as low as possible will let you expand your business options while maintaining a good cash flow.