Stepping into a high-risk industry is never easy. Your company will undoubtedly face many challenges along the way, but with sheer hard work, perseverance and research, you can improve your reputation and reliability to not only become a leading competitor, but to prove your business is no risk at all, and here is how…
Identify Your Risk and Why
You must identify why you are a high-risk industry before you do anything. For example, an ecommerce business will most likely be viewed as high risk, because they can encourage people to input their financial and personal information, which could result in consumer data theft and fraud.
A gambling company may also have a poor reputation before they have had a chance to prove themselves, which is due to historic fraudulent activity in the industry – meaning a business could be perceived as guilty before they are proven innocent.
Other high-risk industries include:
- Investment opportunities
- Consumer finance
- Telemarking services
- Collection agencies
- Used car sales
- Pawn shops
- Travel agencies
Opening Merchant Accounts
One of the biggest challenges your company might face are merchant account providers, who might be unwilling to grant a merchant account due to your industry’s risk factor. You might know you are a reliable business, and you probably even have the books to prove it, but a dependable merchant will not take any chances with credit or debit card transactions, so will simply refuse to work with your business.
This can be incredibly frustrating for a company. Fortunately, there is light at the end of the tunnel. Companies such as Payment Savvy understand high-risk businesses and their complications, which is why they can help with affordable high-risk merchant accounts so your company has the tools to succeed in the marketplace.
Limit Your Charge Back Rate
If your customers are commonly cancelling their transactions or demanding refunds, you can almost guarantee you will become an unattractive candidate for a merchant account, as they may believe your company is embarking with fraudulent activity. Travel companies are often forced to deal with many cancellations and refunds, so are often deemed a high-risk for a merchant account. A bank will not want to put their own services in danger, so a merchant banker will decline to work with a company with a high charge back rate.
You might be eager to sign-up to a merchant account, but you may not appear to be a reliable company if you are new to your industry. Merchants are looking for businesses with a proven track record in a dependable industry, so they need to see you are a sustainable company before they grant your request.
Remember, every business comes with a certain level of risk, so don’t allow a high-risk industry to prevent you from becoming a leading player in your field. The best way to become less of a risk is to offer a reliable, sustainable and consistent service, whilst identifying different opportunities to boost customers’ trust in your business.