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There are high risks and high rewards for those working in social media and on the Internet. While some new ideas seem like sure bets, others carry high chances of failure. Examples of higher-risk high-tech startups include travel apps and websites, dating or matchmaking platforms, e-cigarette retailers, online vendors of adult content, and mail-order pharmacies that sell through a website.
All of these ventures require a credit card processor that’s okay with high volumes and many chargebacks. Processors such as High Risk Pay have experience working with startups in these industries, so we understand the inherent risks.
It doesn’t matter if your startup is in an online industry or not; you risk making rookie mistakes if you’re new to running a business. The potential of missteps is one reason startups come with so much risk.
A common rookie flub is to go too far in the claims you make about your product. If you don’t carefully vet them with a lawyer, you may face a big wave of chargebacks. This could happen if angry customers tell their credit card company they want a refund. They’ll say the product doesn’t live up to the hype in the ads. Lawyers can help you avoid overstating your product’s features in your ads and other marketing material. But attorneys cost money, and many startups can’t afford one. Without legal advice, your startup faces more risk.
Another reason startups are risky is that owners forget to do boring but important paperwork. From setting up phone systems to paying permit fees, business owners have an extensive list of dull tasks to do. Even skilled business people may forget important details and let some work fall through the cracks.
Consider the fact that a startup may not have accounts payable system in place to pay bills. Instead, someone on the small staff may have that job, along with many other tasks. One late or missed payment to a utility provider or supplier, and your startup could lose credit. The next thing you know, you’re having a tough time working with lenders.
This is another instance when a high-risk merchant account comes in handy. At High Risk Pay, we’re used to dealing with companies that are just starting out and may have shaky processes in place. We know that it may take time for startups to catch up on their bills and show they can make on-time payments. Even knowing about these potential problems, high-risk merchant account providers like us are willing to accept the risks associated with startups. You may also check this, merchant account for e-commerce.
Once bill-pay processes are in place, and the startup is humming along, the owner hopes that business booms. The best startups do see fast growth; that means your customers are buying what you’re selling. It also means you’re receiving a high volume of credit card payments. A sudden burst of credit card activity is apt to make some credit card processors nervous. Some may even freeze your account. That’s why high-risk merchant accounts are ideal for these situations because large volumes don’t scare these processors. They take bursts of sales in stride, satisfied that your business is doing what it’s supposed to — making money.
Entrepreneurs who run startups understand there will be false starts and setbacks. They also know how to recover. If they see that a marketing strategy or product isn’t working, and they aren’t afraid to change or try something new. While this agility in responding to feedback from the market is crucial to the success of a startup, some traditional financial institutions may see these fast changes as a sign of uncertainty. They may not want to lend money or process credit cards for a startup that seems to shift gears too often.
In contrast, high-risk merchant account providers understand that business owners need to do what’s best for their venture. As long as communication remains open, companies typically won’t have their high-risk merchant account shut down when they try a new product, rebrand, or change industries.
When dealing with startups that are knee-deep in risk, getting financial services can be tricky. Standard credit card processors and banks may not want to take on the uncertainties that surround these kinds of ventures. The lack of financial support for entrepreneurs can be frustrating.
The good news is that high-risk merchant account providers like High Risk Pay know startups are unpredictable. They keep that in mind when reviewing an application. We’re prepared to be your partner in getting your business off the ground. We want to see you succeed.
What’s important is that you share all pertinent information on your application including bankruptcies, bad credit scores, and any other money problems you’ve had. Even with a complete picture of your challenges, you can trust that we’ll give your application fair consideration. Even if you are an individual or business with significant financial concerns, we still approve 95 percent of applications for merchants just like you.
What are you waiting for? APPLY NOW!