3 Hidden Characteristics of Your Business That Can Make it High-Risk

It’s common for a business owner to get shocked at the news of being categorized high-risk. But this classification shouldn’t break your heart because some internet merchant account providers see this as an opportunity.

There are instances where retailers often don’t understand why they get termed as high-risk. Here are 3 characteristics of a company that you didn’t know can make it high-risk.

1-Internet-based Payment processing that involves Subscriptions & Recurring Billing

Recurring billing businesses are known for high chargebacks. We’ve seen cases where a customer on a subscription plan files a chargeback due to dissatisfaction. So the mention of a recurring billing and subscription plan alone means you’re a risky business.

2-When Your business needs a Virtual Terminal

Accepting card payments via phone was a well-liked trend until shoppers and payments experts understood how risky it could be. What are the dangers?

  • First, banks can’t confirm what virtual business are taking part in unlike they can do for other companies by logging into and checking their website.
  • Second, a customer giving his/her credit card info through the phone may share it to a fraudulent merchant. Or lose it to more dangerous criminals if the merchant writes the information on a piece of paper and misplaces it.

These are the two reasons why asking for a virtual will raise the PSP’s eyebrow.

3-Multilevel & Affiliate Marketing

Such businesses usually come with many risks. The Multilevel Marketing Model involves building a group of sub-merchants to trade in a particular product and growing the network to increase revenue. All sub-merchants are liable to a buy-in fee after which the can start in on selling the item or service.

Now, the main problem with affiliates is that sub-merchants often feel they are not making profits to their expectations. This dissatisfaction and feeling of betrayal may drive a merchant to withdraw and request the card issuer for the buy-in fee.

For the above reasons, any MLM structured businesses are deemed high-risk.

Conclusion

At BPP we believe that enlightening the merchant is part of good service. Now you know understand why you may sometimes be categorized as high-liability.

Author Bio: Electronic payments expert Taylor Cole is a passionate entrepreneur who also enjoys writing, playing guitar and camping. Bestpaymentproviders is UK’s best internet merchant account company serving both traditional and high-risk merchants.


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