The Worth Of A High-Risk Merchant Account
How worthy are you? Putting it in straight words, it simply means how eligible you are to avail a service or facility. A bank account has become mandatory for all the citizens, but it does not give excuses on the number of KYC documents to be submitted. Likewise, when you are starting a business, you need a merchant account to handle the backbone of financial transactions. The banks will definitely check your profile and how prospective your commercial activity is. If you are classified as a High-Risk merchant by the banking firms, the criteria to check your eligibility differs and are more stringent. It is a facility to manage money for running your business that demands tremendous management efforts and your working plan should be worthy of the effort.
Let us see the main requirements or restrictions put forth by merchant account processors to show the green flag:
- Daily deposits: There will be an upper limit to the maximum deposit that you can permit in your account in a working day. To support your transactions, the processors, permit you to accept multiple deposits within the limit in a single day.
- Collection of transaction receipts: How good are you at keeping legal records of transactions? The collection of bills or invoices and receipts of received payments creates a systematic method for tracking revenues and preventing frauds.
- Daily transaction limit: Again, there will be an upper cut-off on the number of transactions, both inward and outward using your merchant account. The limit is mostly on the amount per transaction, rather than the number.
- Rolling reserves: To reduce the risk accrued to the processor, a fixed percentage of your sales revenue is held by the processor for a specified period of time. The rate and time are specified prior to signing the contract. The account provider is sure to carry out a profile check of your business before giving the contract and here are the findings explained in the form of contract terms.
- Type of business market: The processor gives importance to the market where you are selling your business. Offshore markets tend to put the processor on alert and check how suitable you are to handle international transactions or financial relationships with a foreign bank.
- Chargeback ratio: The lesser the ratio of your sales being forced to return to the customer due to unsatisfactory quality or service, the better you are placed in the good books of the processor.
- Operational history: It is important to furnish your time of operation in the market or for how long your business has been running with cash flow. There is a minimum requirement of transaction history to be submitted.
- Marketing methods: Your selling scope is often determined by the marketing techniques to reach out to the customers. The account provider has to assess your selling power.