Of course, im sure even a high risk payment processor will kick you out if you have lots of chargebacks and ccomplaints. But if your business isnt the highest risk in the world type business, and if your chargeback rate is less than 1%, then a reliable high risk payment processor may be the way to go.
5% on every payment? Take it.
10% rolling reserve? Take it.
I work with a lot of high risk processors (and also low risk ones) for the past 5 years (and in the payment/anti-fraud business for 11 years now).
My piece of advice will be:
- Be sure your business is really high risk (many people on this forum are convinced they run a high risk business when they dont)
- The MCC (merchant category code = your business vertical, for instance, Gambling = 7995) is sometimes more important than your chargeback rates.
You have many tricks to decrease chargebacks (service chargebacks or fraud ones) and a good high risk processor will be able to guide you (I had constant and controlled 5-6% chargeback rate on some websites)
- Do not work with PayPal, Stripe or any PSP not aware of what you process. You need to work with a PSP/processor aware of your real business to avoid being shut down with no warning. You have many PSPs on the market willing to take high risk merchants and it depends on the risk level and your acitivity.
- As Scorpion Ghost said, if they offer you 5% MDR + 10% reserve, TAKE IT. A PSP will accept you because they will generate a good margin. If a PSP offers you a Stripe pricing, (lets say 1.5-2%), GO AWAY. It means they have no clue about the risk therefore will stop your account one day without warning. I saw people losing 100-150k a lot of money because of it.
PS: A decent volume for the avg PSP starts at 200K per month, I see a lot of people talking to a processor like their monthly 30K volume is huge. For them, it is a tiny volume whicj means a tiny margin. Try to convince them about your expansion, how your 30K will become 150K because of X, Y, Z (business plan works well).
- If you do not own a company or own one in an exotic country (ex: Seychelles, HK, Singapore, etc.), you will have some issues to find a processor. Try to have a clean company setup before applying.
- When you apply for opening an account, ask the provider to which acquirer they introduce your application. You need to avoid having 4 processors asking the same acquirer/bank to open your connection. The acquirer/bank will find it suspicious and might not accept any of the application.
- If you start to generate a consequent volume, try to open 2 merchant accounts with 2 different processors. You need to use the two of them. Do not open one as a back-up to use it in case of emergencies. Inactive merchant accounts are closed after a certain period of time.
- Avoid Chinese processors. High & hidden fees (like random FX fees to be paid in your currency), uncertainty to be paid, impossible to go after them. A lot of stress at the end.
I hope it can help
