Whether you’re a merchant that is selling your goods or services in a retail space, solely online, or both, the main concern for most business owners is how to best process credit card payments in a way that includes low rates and top notch security.
Depending on the type of business you have and the kinds of goods or services you sell, merchants are assigned either in the high risk or low-risk category by credit card processors. This is because most payment processors prefer to do business with merchants that are low risk because the liability that comes with a high risk merchant is typically not something they would want to take on.
Why are Merchants Considered High Risk?
Let us back-up for a second and quickly explain why your company could be placed in the high risk category. In most cases, being considered high risk is due to one or more of the following reasons:
- High levels of fraud
- Excessive chargebacks
- Bad credit history
- Little or no credit card processing history
- Recurring payments approval
- Multiple currency approval
- Typical monthly sales volume is over $20,000
- Many credit card transactions are larger than $500
- Seasonal or sporadic earning patterns
- In an industry known for high chargeback ratios
How you process payments and sales methods can determine whether your business is deemed high risk or not. For example, if you operate a brick-and-mortar and have an EMV terminal, the chances of fraud occurring are minimal because the customer's card has to be physically present. And, because the client is also present, they can dispute any fees in-person until their card is charged.
However, if you’re in an industry that has been deemed risky (such as running an eCommerce site), the chances of fraud are much higher and certain measures will need to be taken (such as implementing a fraud protection service) in order to properly secure your customer’s sensitive information and ensure that all transactions being processed are authorized.
In conjunction with enabling fraud protection, securing a high risk merchant account with a reputable payment processing company like PayKings, will equip you with the protection you need to process credit cards and prevent any cases of fraud.
Locate a High Risk Credit Card Processor and Play by their Rules
As stated earlier, you will need to find a credit card processor that works with high risk merchants.
Not only do these companies process credit card payments via a provided merchant account, they also work together with you to decrease chargebacks and get your account setup quickly.
Do your homework and find a trustworthy processor that fits your particular business needs.
Limit Failed Transactions
There are a growing number of fraudsters who will acquire a large amount of credit card numbers on the dark web in order to utilize them on eCommerce sites. While that may be troublesome for businesses, the good thing is these nefarious individuals don't always have all the cardholder's information, such as their zip or CVV code.
That doesn't mean that they'll give up that easily. They'll keep trying to guess or figure out this information until they get it right. On your end, you must limit the total amount of failed attempts allowed. It is standard to place the amount at two to three failed attempts.
Flag Large Transactions
Let us be honest. Fraudulent transactions and chargebacks are bad, however small or large the transaction size. Bigger transactions, though, can be particularly detrimental for smaller businesses since they have such reasonable prices. That means that the company might have to shell out more cash for refunds. Fraudsters generally also try to process bigger transactions, quickly, before the card is blocked.
To protect yourself, limit how many large transactions that you process from the percentage of flat-dollar amount or your ticket price and always manually examine each transaction. If anything appears suspicious, it is in your interest to have that transaction be immediately verified by the customer by a call, text or email.
Follow Basic Security Measures
Sometimes the best way to protect you and your clients is by decreasing risky behavior like:
- Leaving computers and tablets unlocked in unattended public areas
- Throwing away bank and credit card statements in the trash without shredding them
- Not utilizing two-factor confirmations for online statements
- Emailing sensitive information
- Maintaining your PIN on your card or wallet
- Utilizing strong passwords and not keeping your software upgraded
- Educating yourself and employees in the ways which you can get scammed online
You and your business do not have to become a victim of fraud. The steps listed above to keep yourself protected is just the beginning for how to keep your credit cards and business funds secure. Partnering with a company that provides reliable credit card processing through a high risk merchant account, while also offering fraud and chargeback protection services is the key to your financial success.