The category of high risk e-Check/Credit Card processing includes any business in an industry with one or more of the following characteristics:

a history of high-chargebacks,

irregular very high-ticket sales,

in an industry that large banks are unwilling to support, or

highly regulated industry.

The highest risk category includes businesses who have been dropped by a previous e-Check/Credit Card processor, and companies whose owners have bad personal low credit scores. High risk merchant account group is based on your business’ type. Every individual businesses track record anyhow.

How do I get a high risk merchant account?

It is a nice question and the answer is very simple, just sends your application for a high risk merchant account with the underwriting department to review the application, and once approved, as soon as your application approved you make payment. That is it your High Risk Merchant Account is active.

Almost Every bank and e-Check/Credit Card Processor will be happy to provide you with Payment Processing if you own a retail business, bakery, etc. Unfortunately, that is not the case for high-risk occupations. It is usually because the sponsor banks or their processors as regulatory and / or chargeback risk will not write high-risk occupations. So, it’s better to start with the question "is my industry to offer high-risk merchant accounts for businesses?" Usually the seller will say that they do, but then at the completion of the application process, you realize that the underwriting department does not.

Blueberry we issue all-inclusive e-Check/Credit Card processing services to many of high risk merchants, ranging from initial to businesses processing millions of money a month. Just complete our little minute free online application, then we’ll email you a PDF copy which lists all terms & conditions for your electronic signature. Once approved, you can begin processing. We’ll handle setting up your chargeback management tools and your payment gateway.

Most high risk businesses want to scale their business to $100,000/month or more in sales, & frankly, as your merchant account provider, we want that too. The problem is that your first merchant account is typically capped at somewhere between $25,000-$50,000. So how do you increase your cap?

Time: A merchant account is in some ways a line of credit from the processor to you. Like any business loan, your track record enables you to obtain a larger line of credit, which means keeping a low chargeback ratio, steady volume, predictable transaction sizes, etc. after 3 to 6 months of successful processing.

Specifically, he / she is looking at the likelihood that the e-Check/Credit Card processor will face losses on the account. Losses occur for e-Check/Credit Card processors in two main ways, losses on the account and regulatory fees. More specifically, the underwriter is trying to ascertain the likelihood that large or high numbers of chargebacks will go unpaid, or monthly bills will go unpaid. On the regulatory side, whether the processor is opening itself up to fines imposed by the government, the card brands or their sponsor bank, by facilitating payments on behalf of a merchant that is engaging in fraud or other bad activity, or just a merchant operating in an industry that their bank does not accept. So, when it comes to high risk underwriting, the underwriter is looking for businesses that have some cash in their bank account, appear to have a solid and legitimate business model, and have ownership that appears stable and competent.

Each business with bad personal or business credit scores, a high chargeback history, an initial, or high frequency or high average tickets can be considered high risk on an individual basis, the majority of high risk businesses are labelled as such by the industry they operate in.

If you’re looking for reliable e-Check/Credit Card processing with the lowest fees in the business, then you’ve come to the right website. Have a question, or want to learn more about our program?

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For any method other than swiped in-person transactions, the sale will actually be processed through a payment gateway, which is just a piece of software that securely transmits card data to the processor. High risk businesses often accept payments in one of 4 ways: 1. Person (often called swiped payments), 2. By phone, 3. Through their website/e-commerce, or 4. Recurring (example EMI). There are many payment gateways available, but most high risk businesses use one of just a few, which are mention below:

Authorize.net Gateway: In high risk business recurring billing capabilities are limited, and many chargeback management services are better integrated with high risk specific payment gateways. There are many payment gateways very easy to use, setup for every E-commerce website or CRM, especially low risk business

Blueberry Gateway: The Blueberry gateway is setup to handle multiple logins with different levels of permissions, which is necessary in order to ensure that any integrated chargeback management services can access your gateway, but not be able to run transactions or access any other part of your account. The Blueberry gateway is specifically to the needs of high risk merchants.

USAePay Gateway: Marketed to price-sensitive low risk businesses, some high risk startups will request to use USAePay to save the $3-5/month in lower monthly costs. It’s a pretty bare bones system, but for a small high-risk merchant that doesn’t need chargeback management services, or to balance multiple MIDs, and is using a major shopping cart that they know integrates with USAePay already.

Most merchants purchase their gateway to their merchant account provider because it is usually cheaper than purchasing it directly from the company. The reason is that the company gives large discounts to the merchant accounts / accounted providers which often means they sell the gateway to their customers for cheaper than it retails.

CRM software is used by high risk businesses to manage their customer’s information, profile, track contacts, track the salesperson associated with the sale, manage recurring billing, track the performance of advertising campaigns, send automated emails, and other customer targeted organizational activities.

Limelight CRM: LimeLightCRM is popular because of some unique features that they offer, such as being able to pre-program transactions, call centre integration, and integrations with a variety of other services like sales tax calculators, etc. The biggest issue is that they’re expensive. The company doesn’t post prices but generally expect a Limelight subscription to cost you more than $500/month, plus a setup fee in the low thousands

Zoho CRM: Zoho is the CRM of choice the smallest high risk businesses that have outgrown using an excel spreadsheet to manage their customer list and payments because of price $12/month low as comparing other. They offer a recurring billing scheduling option, will integrate with a number of payment gateways to issue payments.

Google Sheets: Google Spreadsheets, a free cloud-based spreadsheet similar to Excel to manage their customer information when they first get started. It is free, and by pairing it with the Blueberry gateway, they can achieve basic functionality for very little cost. Obviously, this is not a viable solution to a larger high risk business with more than a few hundred customers, as Google Sheets is cumbersome and was not really designed for this purpose.

A businesses’ chargeback ratio is the number of chargebacks per month divided by the total number of monthly transactions. The dollar amount of the chargeback is irrelevant, as is whether or not you win, lose, or don’t fight the chargeback. Once a chargeback has been initiated it counts as a chargeback. So, if your high risk business has 100 transactions in a month, and 3 customers have initiated a chargeback dispute in a given month, you have a 3% chargeback ratio for that month, regardless of whether or not you win those chargeback disputes

Your processor faces potential Visa / MasterCard fines if your chargeback ratio exceeds 2%, and they continue to let you process. Those fines are in the tens of thousands of dollars, which means that getting fined for allowing you process will certainly cost them more than your account brings in. That means that once the processor begins looking at your account, and sees that the ratio exceeds 2%, they will almost always terminate your account, so the key is to keep your ratio below 2%. Moreover, chargebacks are an early indication that there may be some issue with your business (e.g. fraud, customer dissatisfaction, inadequate fraud/security protection, etc.) and therefore an E-Check/Credit Card processor will use excessive chargebacks as an early indicator that there may be significant financial losses to the processor.

High risk businesses are prone to high chargebacks for any of a few reasons,

1. Insufficient or inadequate fraud filters or procedures for identifying and blocking risky transactions,

2. Many customers are unsophisticated and do not know to call the customer service number listed on their e-Check/Credit Card statement when they have an issue with a charge,

3. Many customers may forget that they ordered something, and because the high risk business may not have great name recognition, the customer may believe the charge is fraud,

4. High risk business owners, particularly startups, may not understand or employ the full suite of techniques and services that are available to keep chargeback ratios low,

5. Many startup or small high risk business owners do not understand that in most cases a chargeback, regardless of whether won or lost, contributes to their chargeback ratio, thus they do not immediately grant refunds,

Before the Sale: In a lot of high-chargeback industries, the key is to quickly identify stolen e-Check/Credit Cards, fraudulent or bad sales before they happen. And if you’re using a high-risk payment gateway a lot of those fraud prevention services can be automatically integrated.

During the Sale: This is obvious, but during the sale, the goal is to fully deliver on the promises made, both implicit and explicit to the customer. So recording salesperson calls, making sure disclaimers aren’t hidden in the fine print but are explicitly discussed, and frankly just providing excellent service.

After the Sale: Once the sale is made, the goal is to make sure that you stay in front of the customer such that if they are at all dissatisfied, you’re the one that they contact as opposed to their issuing bank (aka the phone number listed on their e-Check/Credit Card or e-Check/Credit Card statement). That’s achieved through having a clear payment descriptor, a receipt that explicitly mentions what customers with billing questions should do, making sure that your billing support centre is friendly, competent, and available, and that they understand that the goal is to make the customer happy first. Finally, it also may mean sending out a follow-up email or letter well after the sale confirming that the customer was happy, in order to completely minimize the potential for chargebacks.

After the Customer Complains: In most high risk industries you can dramatically reduce the number of chargebacks through the above methods, but you likely won’t entirely eliminate them. Once the customer complains to their issuing bank, you can use a chargeback alert system, which will provide you with the business owner with a three day window in which you can issue a full refund to the customer, which if you do, the chargeback will not initiate, and your chargeback ratio will not be affected. Note, however, that for chargeback alerts to be effective the issuing bank must also participate in the program. Currently, the coverage is approximately 30-40%.

Maintain high transaction counts: Your chargeback ratio is determined by the number of chargebacks divided by the number of monthly transactions, regardless of the dollar amount of those chargebacks. So, a high risk business with only 50 transactions per month is at a much greater risk of exceeding their chargeback percentage threshold by a few random chargebacks slipping through, than a business doing 500 chargebacks. Obviously, you can’t simply wish that your company was 10x its current size, but it does mean that small businesses need to be particularly vigilant about making sure that they identify and block fraudulent transactions, and work hard to keep customers happy.

We’ve Got You Covered.

Blueberry provides all-inclusive merchant services to hundreds of high risk merchants, ranging from startups to businesses processing hundreds of thousands of dollars a month. So when you’re ready, we’re ready.