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How to Get a High-Risk Merchant Account

Posted on 5 June, 2016

You know the saying: Big risks bring big rewards. But before you can reap the exciting rewards as a business owner, you have to do the not-so-glam legwork to make it happen. One of the items on your long to-do list is to get a merchant account so that you can offer more payment options to your customers. Those who own businesses in high-risk industries such as travel or e-cigarette retail may have difficulty opening a merchant account. But rest assured: You can do it.

Clean Your Financial House

If you have a previous merchant account in your name, make sure it’s in good standing. Pay any outstanding fees or balances. Get your personal finances in order by checking for overdue payments, and pay them immediately.

Share Your Financial History

credit history

Image via Flickr by GotCredit

The first step to securing a merchant account is to share your financial history as a part of your merchant account application. If your business is established, provide your enterprise’s financial statements. While some business owners may be hesitant to disclose this information, they must do it. It’s a crucial part of overcoming the concerns that processors may have about working with a business in what they may consider a risky industry such as telemarketing or e-commerce.

If your business is less than one-year-old, offer your personal credit history to demonstrate your ability to manage finances. In the absence of a long track record for your company, a pristine personal history gives you credibility. When you have multiple people applying for an account on behalf of your business, be sure that all of them have strong credit histories. If you and your associates do not have strong records, be honest in disclosing previous problems, then find a company that specializes in offering high-risk merchant accounts, because it will be more willing to work with you.

Give an Honest Volume Estimate

Some businesses are considered high-risk because they expect to have high trading volumes. On your high-risk merchant account application, it’s likely that you’ll have to disclose your anticipated volume. You can use your company’s past performance and projected future growth to come up with a figure. Be honest and as realistic as possible. A merchant processor will see it as a red flag if your estimate is far larger than what’s typical for your industry. At the same time, you don’t want to underestimate your volume.

Write a Compelling Cover Letter

cover letter

Image via Flickr by wocintechchat.com

Write a cover letter to make your case succinctly. Be direct in addressing potential areas of concern for the payment processor. You should highlight your business plan, explaining why you expect high volumes and describing reasons for prolonged fulfillment periods. You may also discuss how past credit problems became learning opportunities that shaped you into a better business person. Be sure to include any relevant facts that show that your company is poised for success, such as the involvement of a high-profile individual.

By taking these steps, it’s possible to secure a high-risk merchant account. Even if you have had financial difficulties or own a business in a risky industry, you can still provide better payment services to your customers.

 

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Bad credit merchant account credit card processing services

Accept all major credit cards

Regardless of Credit History!