eCommerce with Future Deliverables

Obviously, many e-commerce websites operate on the grounds of future deliverables. While payments can be provided with such relative ease online and with the desired convenience of making purchases from home or your phone, your products or services can be delivered later after receiving payment.

Online dating services and subscription box companies are prime examples of businesses that require a high risk merchant account. While there are lots of secure e-commerce businesses with stellar reputations, these high risk businesses are still prone to excessive chargebacks.

Additionally, if an e-commerce website has a yearly membership service or a billing model that takes payments on a recurring schedule, chargebacks danger increases. In turn, high chargebacks can translate to dropped accounts.

High Risk Industries with Reputational Risk:

Reputational risk is another example component of high risk industries. For example, adult entertainment, CBD oil retailers, and people prone to experience information theft are categorized as high risk due to reputational risk.

And let’s not neglect the medical marijuana business. Although marijuana is legal in some states, traditional payment processors have regulations against it. Many won’t align themselves with this relatively new sector. In turn, companies specializing in medicinal marijuana must find payment processors, like Signature Payments, that specialize in high risk merchant accounts and have experience and expertise in your industry.

When a company presents reputational risks, conventional suppliers are reluctant to forge a business relationship together. It’s not surprising to learn that banks and low-risk independent sales organizations (ISOs) place emphasis on their public image. As a result, they don’t want to risk tarnishing it or negatively influencing how potential or prospective customers see them.

High risk businesses pose too much risk for traditional banks who aren’t willing or equipped to offer high risk merchant accounts.

Businesses Dealing with High Priced Products or Services:

Automobile warranties and companies in the airline and travel booking industries fall under the high risk category as well. Due to the fact their products are expensive purchases. High ticket sales and a higher likelihood of returns (say from a canceled vacation) make reverse transactions more likely.

The higher the expenses paid to any specific industry, the larger the opportunity for chargebacks. Basically, if you’re a dealership or airline that falls on some tough times, the absence of sales will signal poor financial performance to conventional payment processors. As such, they tend to levy hidden and extra fees on you, which helps them deal with the fluctuations in sales.

Though many companies in the high risk category may struggle to find a conventional payment processor, alternative solutions exist. Moreover, you will find payment processors with experience working alongside businesses in this category. SignaturePayments is one of them – we can help set you up with a high risk merchant account and get your business to accept online payments in no time.