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HIGH RISK Merchant service providers and OFFSHORE merchant account limits

For many traders, the usage of their merchant accounts for processing their business on a daily basis is never a cause for worry. When a bank issues a merchant account for processing of credit cards, they usually tend to place processing capability limits on the merchant accounts on criteria like business longevity, the size and plan of the trade and personal credentials. The businesses which anticipate faster growing rates and higher volumes of sales by credit cards have restricted processing to begin with. Examples of these kinds of businesses are telephone order traders and ecommerce traders. For these kinds of trade owners, limited capability for processing implies limited growth.

In a number of cases, processors and banks access high rates in young merchants or those who are looking for fast growth. The rates paid by merchants are among many other financial constraints that are faced by merchants. Some banks hold a part of the merchant’s revenue for imminent chargebacks even though the chargeback ratio is low at the start. For telephone order and ecommerce merchants whose business is done on the basis of card-not-present transactions, these charges are applicable. Many merchants negotiating fees and rates with processors and banks can get complex after the establishment of initial rates. A commonly used negotiating tool used by businesses while negotiating the discount rates is the assurance of volume with respect to the amount of dollars and the transactions processed.

Economically speaking, high volumes of processing is good for the banks as well as the merchants since banks make profits when the dollars are processed and traders make profits with low rates. However, false high volume assurance is common which results in slow payments and increase in rates. For those merchants who use this tactic as a negotiation tool usually end up facing dismay and frustration.

This cycle of bank and merchant relations is being arranged during the start if a relationship now-a-days by the merchant account service providers. This is because, the negotiations for rates is finished before a merchant account is set for a trader. This leads to a stronger and better relationship for both the traders and the banks as the establishment of rate scales is done and the financial institutions do not get blogged down with such issues are the merchant is established.

The merchant account service providers usually act like buffers for financial institutions, which is appreciate by them. However, with respect to traders, the relationship gets simplified and it becomes easer to foster such relationships due to a one-point contact. Trust plays a vital role for establishing any relationship and in trade, especially while dealing with issues of finances, trust is the basis of a relationship. While approaching a merchant account service provider, a processor or a financial institution, every merchant needs to have a certain level of comfort with people he/she does business with. The best possible thing to be done is to establish well-defined parameters right at the beginning of a business.

Contact one of our helpful account representatives to assist you in the setup of a high risk merchant account or offshore merchant account for a high risk merchant.