We all know that expanding your business beyond borders is an attractive option, but it comes with financial complexities for some businesses. For those businesses labeled as high-risk, securing a high-risk international merchant account is often a major problem for them. According to a report by Statista, global e-commerce sales are projected to reach $6.3 trillion by 2024, highlighting the growing need for seamless international payment processing. However, high-risk businesses, including sectors like gambling, adult entertainment, and online gaming, face additional scrutiny from banks and payment processors.

Given the increased chargeback risks, fraud vulnerabilities, and legal uncertainties, traditional financial institutions tend to reject applications from high-risk merchants. In fact, it is estimated that over 50% of high-risk businesses face initial rejection when applying for credit card processing services due to the inherent risks involved. But the story does not end here – we have mentioned some essential steps in this blog for such businesses – facing problems in getting approval. By following the below-mentioned strategic steps and improving specific factors, your chances of approval for a high-risk international merchant payment account can significantly improve. Read on.

Why High-Risk International Merchant Payment Accounts Matter

Before diving into the strategies, it’s important to understand the value of a high-risk international merchant account. This type of account allows businesses in high-risk industries to process credit card transactions on a global scale, ensuring secure payment options for their customers. Without it, businesses might face higher processing fees, delayed transactions, and even business interruptions.

Securing this type of account opens doors for global expansion, reduces payment issues, and builds trust with international customers. However, the challenge lies in convincing payment processors that your business is a manageable risk.

Here is what high-risk merchants can do to improve their Approval Chances

1. Build a Strong Financial History

One of the primary concerns for banks and high-risk payment processors is the financial health of your business. A solid financial history with a stable cash flow reduces the perceived risk of approving your application. Merchant account providers will scrutinize your business’s financial records, including bank statements and tax returns, to assess your credibility.

Steps to Strengthen Your Financial History:

• Maintain Consistent Revenue: Ensure that your business generates consistent revenue over time. Fluctuating income can raise red flags and lower your chances of approval.
• Monitor Cash Flow: Payment processors want to see a steady cash flow, so avoid any negative balances or cash shortages in your accounts.
• Maintain Transparent Financial Records: Keep clear and transparent financial records, including tax filings, revenue reports, and balance sheets, to prove your business’s financial stability.

2. Reduce Chargeback Ratios

This is another key reason for the rejection when applying for a high-risk international merchant payment account is high chargeback ratios. A chargeback occurs when a customer disputes a transaction and requests their money back through the issuing bank. For high-risk merchants credit card processing, maintaining a low chargeback rate is essential because excessive chargebacks are a red flag for merchant service providers.

How to Minimize Chargebacks:

• Clear Billing Descriptions: Use a recognizable and accurate billing descriptor on customers' credit card statements to avoid confusion and disputes.
• Provide Exceptional Customer Service: Resolve customer complaints before they escalate into chargebacks. Offer easy refunds and quick support to dissatisfied customers.
• Use Fraud Prevention Tools: Implement tools like Address Verification Service (AVS), 3D Secure, and fraud monitoring systems to detect and block fraudulent transactions.

3. Choose the Right Payment Processor

There are many payment processors in the market but it is important to know that not all payment processors are equal, and for high-risk businesses, choosing a provider that specializes in your industry can make all the difference. Look for experienced high-risk payment processors in handling international transactions for industries similar to yours. These processors will better understand the unique challenges your business faces and offer tailored solutions.

Criteria to Consider When Selecting a High-Risk Payment Processor:

• Industry Experience: Ensure the payment processor has a proven track record in providing services to high-risk industries.
• Global Payment Capabilities: The processor should support multiple currencies and countries to help you navigate international payments seamlessly.
• Chargeback Management Services: Choose a processor that offers comprehensive chargeback protection and dispute management.

4. Optimize Your Business Model

When applying for a high-risk international merchant payment account, it’s essential to show that your business operates responsibly and efficiently. Payment processors want to work with businesses that have long-term sustainability and a well-managed business model. This includes compliance with industry regulations, customer satisfaction, and clear refund policies.

Steps to Optimize Your Business Model:

• Regulatory Compliance: Ensure that your business complies with all legal and regulatory requirements in both your home country and the countries you operate in.
• Offer Multiple Payment Options: Providing multiple payment gateways and options can reassure payment processors that your business is flexible and secure.
• Clear Return Refund Policies: Establish and communicate clear return and refund policies to reduce disputes and build customer trust.

A survey by McKinsey Company found that businesses with clear, customer-friendly return policies saw a 20% decrease in chargebacks, demonstrating the importance of transparency in operations.

5. Work with an Experienced Merchant Account Provider

Applying for a high-risk international merchant account is a complex process, and working with an experienced merchant account provider can increase your chances of approval. The right provider will help you navigate the documentation requirements, guide you through compliance issues, and ensure your application is prepared to meet the standards of international payment processors.

How an Experienced Provider Can Help:

• Expert Guidance: They will help you present your business in the best possible light to payment processors.
• Tailored Solutions: They can recommend payment processing solutions tailored to your specific industry needs.
• Application Support: A skilled provider can help you gather all necessary documentation and negotiate favorable terms on your behalf.

According to a report from Global Payments, working with a merchant account provider with high-risk experience can increase your approval chances by 25%.

In short,

Securing a high-risk international merchant payment account may undoubtedly seem challenging, but with the right approach, it’s entirely a different aspect. By building a strong financial history, minimizing chargebacks, choosing the right payment processor, and so on you can significantly improve your approval chances and ensure long-term success in global transactions.

At PayCly, we specialize in providing tailored payment solutions for high-risk businesses, including high-risk merchants credit card processing. With our expertise, you can easily tackle down the complexities of international payments and ensure smooth, reliable payment operations. Contact us today and take the first step toward global success.

Visit us at: High-risk merchant account instant approval

Originally published on: Medium