High-Risk Merchants – Payment approval tips

As more and more States legalize both Marijuana and Sports Betting this will lead to thousands of new online businesses that will be cropping up. Just because you build a website offering a new service such as this and now you are ready to take payments, there is no guarantee that a Payment Provider will approve you.

This trend is even more evident with merchants who are classified as ‘High-Risk’. There are a whole host of industries such as CBD, Online Dating, Travel, Ticketing, and Subscription based businesses that are classified as High-Risk. If your business falls under the High-Risk category there is a strong possibility that you could be turned down during the processor’s underwriting process. According to Global Access Consulting (GAC) a Merchant Consulting company based in the United States the percentage of High-Risk accounts that are turned down for payment processing can be as high as 40%.

Why are merchants turned down for a processing account? According to GAC there are a whole host of items that an Underwriter looks for when they are doing their due diligence and anything that looks suspicious are grounds for an immediate decline of their application. Most of the problems are attributed to things found on that company’s website. A small example of these include:

  1. A business address that does not check out. Underwriters are not going to approve an account where the business address is a Mailboxes Etc. business location. Same goes with a PO Box.
  2. What is your refund policy? It must clearly be stated
  3. Are your Terms of Service in line with what an Underwriter expects
  4. If you are Reselling services from another company, do you have Reseller Agreements in place

There are many other factors that can hurt a merchant’s chances of being approved. If any suspicions arise then you won’t be approved. In addition, the owners of the company will also have to pass the KYC process. If the LLC that the business is listed under has had any previous issues chances are very high that the account will be rejected.

Companies like GAC consult with merchants looking to get approved by a provider. For a one-time fee they will guide you through the process, point out where the shortcomings are, and provide solutions that will increase the businesses chances for approval. Don’t fall into the trap thinking just because you build a website that payment providers are lining up to service you.