Business never comes without a Risk. Even placing an idea and executing the company is a risk. Also, every step, collaboration, product, sell you choose has its danger in work. Sometimes the business you set up can be good and sometimes bad. It means the work may involve less risk, and the business with the products may have conflicts at high-risk processing. Reasons vary to define your business’s risk positioning.
The e-commerce industry is booming, making less use of cash but more of online banking. For any successful business, much needed is online payment processing. That will help you to grow your business. With every online work, you get the risks and frauds that will affect your business.
In this article, we are discussing the statistics of every high-risk processing merchant. We will also explain a lot of information about the business at high-risk processing with the merchant’s account.
What is a High-Risk Merchant account, and why do you need it?
You require a high-risk merchant account when your work has a risk of fraud and chargebacks and needs to accept card payments. As it happens that many processors will not work with industries that have risk industries like tobacco or others.
Which Factors make Merchant Account at High Risk?
Every business needs an effective method to do Payment Processing. You will see very few businesses can boom without a proper method of payment processing.
Whichever business is small or big, offline or online, to have a proper foundation, it needs an effective account processing business if it becomes a case where your profession is identified as a high-risk account for merchant service that can give the problems to plan about accepting payment firms counting credit cards and others. Few risks that can make your business account stand out negatively.
What are Chargeback Statistics?
The categorization of your business as high-risk depends on the nature of your business. Suppose your profession might have high risks and chargeback ratios involved. For being a reliable high-risk payment, merchant processors know the chargeback statics. These can make you at risk of applying for merchant bank accounts.
There are a few statistics that may affect your business credibility. It is essential to be aware of how chargebacks impact work, especially high-risk payment processing. The chargeback statistics may result in unintended consequences.
What Do These Statistics Mean for Merchants?
Chargebacks Statistics is one of the threats that highly impacts the business. Demanding of Chargebacks starts long after the transaction is complete. The claims applied on the merchandise are not described by the cardholder.
Customers may claim that they have not received the item, a needed number that can demand a chargeback.
Of course, the merchant will get hit with the loss of revenue. Also, I will get penalties with an additional chargeback. To protect your business, you need a merchant services provider. The necessary merchant services have chargeback prevention methods that will help to identify potential fraud and analyze risk.
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Following are a few Common Reasons For Chargebacks Statistics:
- Chargeback rates get increased with the increase in delay of shipping.
- The respondents say 45% of delivery delays are among the top reasons to increase the chargeback rate.
- The business may have lacked experience with chargeback prevention.
- The higher online transaction gives exposure to significant chargeback risks.
- The customer may claim that the purchase was made using a stolen credit card.
- 26% and 15% of customers claimed that the product charges never arrived and received the wrong product.
- 4% of customers claimed that the product did not meet their expectations or match the description.
What makes a business at high risk?
There is no specified framework that will relate to risk involvement in the payments industry. It involves its services that will have their standards. Sometimes there is a clear statement about processing that does not want to work with specific industries and why they want to work with them. The type of business defines their acceptance. You need to submit a specif application about your business.
Following are other reasons for your high-risk business processings:
- Type of Industry, Location: It happens that some businesses grow depending on the reputation of the business. It also depends on the location of your Industry in which country and how the rules are maintained there.
- The financial history of Company and Merchant Account History: Maintain your business account history and also your personal account history. Your merchant account history needs to be compiled with the merchant service provider.
- The more you are in business can impact the risk. The high-risk business doesn’t mean that you will not have a chance to accept credit cards. Consider a working merchant service provider that is trustable.
- It is a rule that you should not get chargeback with every 100 successful orders. Your account will be at high-risk business if the number of chargebacks may get higher. Other reasons like your credit card history, missed with paying the bills.
- Preventing the Risk Associated depending on the Statistics:
- Practice and know the better preventative steps.
- Mention your clear copy of billing and refund policies.
- Update your customers with details of the transaction.
- You can use the statistics to overcome industry-specific risk factors.
- The fees must have guaranteed the transaction’s security.
- Make sure to take proper steps so that you will not damage your business in the long run.
- Multiple MID accounts that will benefit a high-risk business to avoid the transaction limits.
Being a high-risk merchant account, you need to go through security to receive merchant services. There are various other factors involved in processing that may limit you to having an actual transaction.
The processing statistics like chargebacks may hurt your businesses. Every business needs to defend itself from the economic impact of these statistics. If you are one of the High-Risk merchants, then make sure to protect your business account. You need to work with the right merchant servicer and know about fraudulent activities in detail.