Credit Repair Company Credit Card Merchant Services

High Risk Merchant Account for Credit Repair Businesses


The financial transaction methods have evolved a great deal. Every business big or small now needs a merchant account. Several people find paying with credit cards much easier than other payment methods. This is the case, especially with large transaction volume businesses. To have a steady cash flow, to be able to get the payments in the right time, accepting credit card payment is essential in the recent years. This is where the need for a merchant account comes into the picture. When you have a merchant account you would be able to accept credit card transactions. For this, you would have to approach the right credit card processor. This would make the whole process easier and cost effective as well.

Credit Restoration Companies - Why Are They High Risk?

Credit repair business is one of those businesses which come with a low capital requirement. This is a business that needs a minimum cost of investment for the setup. At the same time, it also offers an ample scope for expansion. If you do it right, you can start out with a small amount and can tremendously improve the business. Due to this reason, there are several people interested in this business. But what some fail to understand is that, though it might seem bright from the outside, credit repair is one of those businesses deemed as “high-risk” businesses. This fact would not come into the picture initially sometimes. But when you are taking steps to open a merchant account for your business is when this factor would evidently pop-up. It might so happen that many of the reliable banks might openly refuse your requests for the opening of a merchant account. So why do all the merchant account providers consider credit repair business a high-risk one?

• The history of the chargebacks seen in the case of credit repair businesses has always been high.

• Customers who transact with these businesses in a situation of credit risk or financial limitations might often initiate a chargeback

• The new companies or even the established ones who fail to devise a wise strategy for chargeback management also would turn out risky. As the number of such ill-managed cases has been pretty high in the credit repair business, there is again a generalized view that this is a high-risk business

• This is one industry where there aren’t any established market leaders as such. Credit repair industry on the whole consists of smaller businesses.

There are several such reasons that have collectively lead to the judgment that the credit repair business is a high-risk profile for the credit card processors.

Shut Off Denied Closed or Cancelled by Processors like PayPal, Stripe, Square?

If banks aren’t ready to process your merchant account, which would be the next option that strikes you? The popular choices would be Stripe, PayPal, and other such credit card, processors. But there are enough reasons to support the fact that you should not approach a normal credit card processor for a business like credit repair. Initially, before a thorough underwriter review is done, these bodies might accept your merchant account request. But eventually, businesses like credit repair would involve high chargeback volumes. So these common credit card processors would find this a violation of their policies. This might mean that your account with them might be subjected to be frozen and held up for a month or more till the issue is sorted out. This would be a much riskier case than being denied a merchant account.To avoid such instances, it is always advisable to apply and get approved by Entrust the high-risk credit card processors.

Best Options for Startups as well as Established Businesses

The high-risk credit card processors come in as a boon for high-risk businesses. Neither would your request be laid off nor would your account be facing the risk of being frozen. This is because the high-risk merchant account processors concentrate specifically on those high-risk businesses. These vendors target in helping out the businesses which are often denied by the popular credit card processors. How do they manage to do it?

    • They have a high-risk business merchant account management strategy in place.

    • They have tie-ups with more number of banks and other credit card processors. By having more than one source, they make sure that there is always a contingency plan to handle the high credit risk situation.

    • This helps them balance the high chargebacks they might have to face.

    • This is how the high-risk merchant account providers make great options even for startups. Even if it is not a high-risk business, some credit card processors might hesitate to accept new businesses. They might even have more stringent policies for these businesses.This would make the situation all the more difficult.

Several startups have failed and have even given up their businesses due to the non-availability of a proper credit card processor for their merchant account. That is how serious the issue can be. This can all be sorted out by approaching the besthigh risk merchant account vendors.

Domestic Banks and offshore options available

Each of the domestic and offshore options come with their own benefits and limitations. For some businesses, it would be mandatory to have an overseas merchant account. If this is the case, a little more effort on evaluating the credit handling and merchant account costs should be put most cases, the onshore options are comparatively less expensive. They also come with smaller processing times. This would be great especially for smaller businesses. So for smaller credit repair businesses, the most efficient option would be to look for a good high-risk merchant account provider. Also, gather the information about the costs and the processing times. Look for one that comes with simpler application processes, impressive approval rates and affordable services. This would ensure that you do not have to put a majority of your capital on your merchant account even before getting your business live on the market. Also, ensure that the merchant account provider offers lower rates than the banks and other credit card processors. This is hard to come by as many high-risk merchant account providers come up with large rates as compared to the banks.