Accepting Online Payments for New or High Risk Businesses
So, you’ve started a new business—either online or in the real world. You have a great product or a fantastic service to offer. Your pricing is competitive, and there’s a high demand for what you’re selling. You have all the resources you need, and your advertising is working very well. Orders are coming in. What could possibly go wrong?
One major pitfall is not being able to accept payments. People no longer pay by cash or check. If you do not accept online payments and credit card payments, you will get few orders or sales, leaving money on the table. So, you go in search of a merchant account to help you out.
Why Accepting Online Payments is Critical
In today’s digital landscape, having the ability to accept online payments is no longer optional; it’s a necessity. Whether you run an eCommerce business, a service-based company, or even a high-risk business, payment flexibility is essential. According to a recent study, online shopping grew by over 20% in the last year alone. So, if you’re not accepting online payments, you’re likely missing out on a significant portion of potential customers.
But for new businesses or those labeled as “high-risk,” getting approval to accept online payments can be a challenge.
The Challenges for High-Risk Businesses
If your business falls into the high-risk category, getting approved to accept online payments becomes more complex. High-risk businesses often face rejection or higher fees from traditional financial institutions due to a greater likelihood of fraud or chargebacks. But what exactly qualifies a business as high-risk? Here are a few examples:
- Industries like arms sales, tickets, loan services, nutritional supplements, and SEO
- Businesses with a history of high chargebacks
- New businesses with no prior operational history
These industries are often flagged due to higher fraud rates, regulatory concerns, or volatile financial histories. But don’t worry; solutions exist that can help even high-risk businesses start accepting online payments.
Understanding Merchant Accounts
To accept credit or debit card payments, you need to establish a merchant account. A merchant account is essentially a type of business bank account that allows you to accept payments from your customers. The funds from online or in-store sales are first held in this account and then transferred to your business’s bank account.
However, for high-risk businesses, securing a merchant account can be a lot more difficult. Financial institutions want to minimize their exposure to risk, and your business’s industry or financial history can make it challenging to get approved.
But there’s good news. Specialized firms can help high-risk businesses like yours get approved for merchant accounts, enabling you to accept online payments and continue to grow.
Solutions for High-Risk Businesses
If your business is new or considered high-risk, there are specific merchant services that cater to your needs. These providers understand the unique challenges your business faces and offer specialized solutions to help you accept online payments. Some of the key services these providers offer include:
- Merchant Cash Advance: Get funding based on your future sales to cover operational costs or expand your business.
- eChecks: Offer an additional payment method that increases the flexibility and convenience for your customers.
- Chargeback Protection: Lower your merchant rates and protect your revenue from fraudulent chargebacks or disputes.
- Cybersecurity Solutions: Protect your business from data breaches and reduce your overall risk profile.
These services are designed to not only help you start accepting online payments but also protect your business from some of the common pitfalls that come with operating in a high-risk industry.
Finding the Right Payment Provider
Selecting the right payment provider can make or break your ability to accept online payments. Some key factors to consider when choosing a provider include:
- Experience with High-Risk Businesses: Make sure the provider has experience in your specific industry. Look for testimonials or case studies from similar businesses.
- Fees and Contracts: High-risk businesses often face higher fees, so it’s important to understand the cost structure upfront. Be wary of long-term contracts that may lock you into unfavorable terms.
- Integration with Your Existing Systems: Ensure that the payment gateway integrates seamlessly with your website or POS system. The last thing you want is a complicated setup that slows down transactions.
For more detailed information, you can check out this guide on how to find the best high-risk payment provider.
Steps to Getting Your Business Approved for Online Payments
Here’s how you can take your first steps toward accepting online payments, even if your business is considered high-risk:
- Do Your Research: Research and identify payment processors that specialize in high-risk industries. You’ll want to focus on their rates, services, and reviews from businesses like yours.
- Prepare Your Financials: Before applying, ensure you have all your financial documentation in order. This includes revenue projections, proof of operation, and any contracts you have with vendors.
- Apply and Negotiate: Apply for multiple merchant accounts if possible, and don’t hesitate to negotiate terms. Sometimes, you can secure lower fees by committing to higher transaction volumes or longer contract terms.
- Implement Security Features: Fraud is a major concern for high-risk businesses, so implement strong security measures like SSL certificates and tokenization. This can help reduce your risk profile and improve your chances of approval.
You can find a more in-depth breakdown of these steps in this resource.
Take Action Today
Accepting online payments is crucial to your business’s success, but it can be challenging for new or high-risk businesses. By finding the right payment processor, you can unlock the ability to accept credit cards, debit cards, and other forms of online payments. This will not only increase your sales but also provide a smoother, more reliable customer experience.
If you’re unsure where to start, consider working with a firm that specializes in helping high-risk businesses. With the right tools and protections in place, your business will be ready to grow.
Ensure your customers can easily pay you, and you can focus on what really matters: building your business.
