Credit Card Processing - What are the Options for a High Risk Business? - By: Daljeet Sidhu

Businesses are considered high risk if they have a high charge back rate and accept card-less payments such as online payments, phone payments, etc. Certain types of businesses are riskier than others such as telemarketers, online gambling and casino web sites, adult service providers, internet auctions, e-cash businesses, advance booking web sites, etc. Credit card processing agencies charge higher rates for their services to businesses with a high risk profile.

What makes a business high risk?

High risk businesses are the kind that:

* have a bad credit rating

* have high turnover

* have high customer dissatisfaction rates

* offer money-back guarantees

* have business processes that make them susceptible to credit card fraud

Can a high risk business have a credit card processing solution?

Just because a business is high risk does not mean credit card processors will not consider it. Merchants need to shop around for credit card processing agencies that work with high risk businesses. A high-risk business usually has to pay a much higher rate for a processing solution than other low risk businesses. The credit card processor looks into:

* length of time in business

* volume of charge backs

If the business has been running for some time, credit card processors assume you are aware of credit card fraud and can recognize a prospective threat. In addition, if charge backs are less, the processor assumes your business though high risk must be doing something right. Some credit card processing firms keep a reserve amount to protect themselves from loss. The amount of reserve varies with the type of business and the risk involved.

How can a good credit card processor make transactions safer?

If a business accepts online credit card payments through an ecommerce application, it is a target for credit card fraud. Good internet credit card processing companies have systems in place to detect suspicious activity and potentially costly fraudulent transactions. The transactions can be held back for manual approval. Many credit card processing companies call customers or the business to check the genuineness of the transaction before processing it.

Many payment gateways have an Address Verification Service (AVS). The address submitted with an order is compared with that on file for the credit card holder. Doubtful orders are held back for manual review.

Many internet credit card processing companies offer advanced services such as IP address blocking, shipping address verification filters, IP shipping address mismatch filters, CCV handling filters, amount filters, etc. The more sophisticated and secure the credit card processing solution, higher is its cost.

All credit card processors are not open to working with high risk businesses, but there are many who will, albeit at a higher cost. Amongst high risk businesses, credit card processing agencies give preference to those that have been in business for some time and show lower than average charge backs for that kind of business. A reliable and secure credit card processing solution reduces the risks of credit card fraud and protects the business and its customers from loss.

Before you hire a vendor, compare multiple credit card processing account quotes. For further information please read our credit card processing small business advice.

About the Author

Daljeet Sidhu is Co-founder at TradeSeam. Read our web based credit card processing advice. Compare credit card processing rates quotes. Sellers JOIN for free leads.

Article Directory Source: http://www.articlerich.com/profile/Daljeet-Sidhu/62234

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