You might run a company that, for one reason or another, most banks, credit unions, and similar business entities would call “high-risk.” Some examples of this might be gambling institutions, agriculture, adult entertainment, cannabis, alcohol, cryptocurrency, etc.
However, just because some entities might consider you high-risk, that doesn’t mean you don’t still need payment processing methods. You have customers, and they need to pay you. As long as what you’re doing is legal, you still need a way to process those payments to keep your business moving forward.
To that end, you need to find yourself a payment processing option, which might be a bank, credit union, or another financial entity. Here is what you want to look for as you narrow down your choices.
You Have To Trust Them
The first thing to mull over is whether you feel like you can trust this entity with whom you are going into business.
Think about Wirecard, the high-risk payment processing brand. In June, they claimed insolvency. Their CEO, Markus Braun, stated that deposits totaling $2.1 billion were missing.
This is an extreme example, yet it does show how you need to do some background checking into any company with whom you plan to do payment processing. You can:
• See how long they’ve been in business
• Search for any news stories about them that indicate they could be in trouble
• See what the Better Business Bureau has to say about them If they appear to be rock-solid, you shouldn’t be afraid of approaching them.
If they seem a little suspicious, then look elsewhere.
What Rate Do They Charge?
Understand that the entity you use for payment processing will charge a fee for their services. You must make sure:
• You can accept that fee
• The amount will not change suddenly
Some financial entities will charge as much as 25% to process your payments. You’re probably not pleased to hear that, but if you know that you’re using a dependable financial entity, it’s likely worth it to you. After all, you need some way of processing those payments.
At the very least, you should check with the different entities on your shortlist to see how much they’ll charge you for various payment processing services. It’s just like comparing prices when vehicle shopping or hiring a contractor.
The Personal Touch
Just because you’re in a business that some financial entities consider “high-risk,” that does not mean they should treat you shabbily. You still want excellent customer service whenever you need it.
You should try to connect with a person at the financial entity you end up using for payment processing. They will be your go-to contact whenever you need help with your business model’s finances.
You should explain to them what it is you do, and they should be enthusiastic about it. If they’re doubtful or seem dismissive, take your business elsewhere.
You might bring this financial institution tens of thousands of dollars in fees or even more than that. You deserve for your connection there to treat you respectfully.
Read The Fine Print
Some of the contracts you might sign when you’re entering into this sort of relationship can be dozens of pages long, and they might use legalese that’s tough for you to understand. You probably grasp the basic concepts, but there might be a ton of fine print to navigate.
Make sure that you bring the contract to your lawyer for them to look it over before you sign. If you are in a hurry to get going and miss this step, you might run into some onerous fees later about which you were unaware.
High-Risk Countries
There are also some countries that financial institutions consider high-risk, just as there are some industries with that moniker. Generally, America, Canada, Japan, the EU, and Australia are countries on the white list. Anything outside of that and a payment processor might say they’re a little iffy.
If you have no problem doing business with these other countries or regions, then there’s nothing to say your payment processor will either. You just need to explicitly mention that you have a presence there, or that’s where you make most of your sales.
If you attempt to conceal this information, the financial entity might decide to terminate the contract without warning.
Payment Processing Potential
If you don’t mind paying higher fees, you should find a high-risk payment processing option without much trouble. You might end up enjoying a mutually beneficial relationship for years.
