If you own a Head Shop or a Smoke Shop you are probably no stranger to how difficult it can be to retain a merchant account, let alone find affordable credit card payment processing. You can get rejected or cancelled in an instant, whether because they realize you are selling “paraphernalia” or just see the word on your website. When you are running a head shop, or other business that might offer ancillary services to the cannabis industry or such you can often feel persecuted despite owning a completely legal business.
In the past there has been a certain stigma around businesses like head shops that they were a seedy place for deadbeats to hang out. With the changing times public perception is softening towards the trade but the banking industry is slow to get on board. They still look at these types of businesses as if they represent a higher risk of liability than other perceived “normal” trades.
There are a few main reasons why a bank will consider you a high risk merchant.
If the industry itself has a high instance of chargebacks, whether or not your particular business has many, they will consider it a risk. They will also put it in that category if they determine that your product itself could be brand damaging to the bank’s brand and they way the general public perceives them.
Acquiring banks will charge higher fees for what they deem to be risky merchants. There are some legitimate reasons why they need to charge more for these types of accounts. A bank who offers high risk accounts will employ more underwriters and implement much stricter guidelines than they would for typical merchant accounts. They will also have a team who is dedicated to monitoring and flagging fraudulent transactions. They charge these higher fees to help pay for the extra staff and to attempt to mitigate some of their own financial risks and liability.
However, there are no requirements for a salesman becoming a high risk merchant account representative. Some representatives will take advantage of high risk merchants by charging them astronomical rates and offer them extremely poor customer service. Frequently, this type of salesman will only be out to sign on as many new accounts as they can, they are not worried about what happens to your account thereafter. They never had any intention of actually servicing your account through its lifetime.
Just because you may be considered “high risk” doesn’t mean you don’t deserve a high-quality, reputable merchant account.
High risk payment processing requires a credible merchant service provider you can count on, one who has experience with high risk merchant accounts. A provider that operates with transparency and has a reputation to establish a dependable high risk merchant account for credit card payment processing so that you can put your trust in them and turn your focus on running your business.
Here are a few tips for considering a high risk merchant service provider:
Often times it is too easy to get sucked in by the sales pitch and the promise of great rates but these rates are usually just a teaser rate and will increase either over time or at a specific point in time. Besides that, the fact is that an unscrupulous provider may end up “selling” your account to the bank anyway, at which time the bank is then responsible for your rates and they didn’t promise you anything.
How long have they been in the industry-
You do not want a newbie. In the high risk realm salesman come and go like a feather in the wind. You want to work with someone who is well versed in the trials and tribulations of high risk accounts. Their knowledge and expertise of the industry will help you avoid unnecessary hiccups.
Make sure they are transparent about the bank they are working with-
There is no reason for secrets here and if they are unwilling to share with you who is providing your high risk account that could be a red flag.
Ask if they are an ETA CPP (Electronic Transactions Association Certified Payment Professional
An ETA CPP is an expert in their field. The Certified Payment Professional has made a commitment to professionalism and personal integrity and is bound by the Electronic Transaction Association’s Code of Conduct. Their in depth knowledgeable of the products and services available gives them the expertise to recommend the best and most appropriate solution for your business.
Do Not just apply anywhere and everywhere!
One of the worst things you can do is to submit several applications with different processors. Often, there are only a few acquiring banks that will take these types of accounts and if you are putting in multiple applications they will see it and raise a red flag. This could ultimately render you unable to get a merchant account.
Submit your application with intention
When it comes to putting together your application your goal is to get an ”A” for accuracy not an “E” for effort. Make sure you fill out the application accurately and entirely and submit it with all requested supporting documents. Remember these underwriters are more strict and you want to show that you are a legitimate business and a responsible owner. When you turn in a neat and professional looking application you are more likely to be approved.
Make sure that your provider goes over your contract with you so that you understand exactly what you are agreeing to and being charged.
Bankcard Brokers has proudly been providing world class service to the high risk industry for over ten years. During that time we have gained extensive experience as well as created long standing banking relationships. We are well equipped to offer the most affordable and dependable payment processing services in the industry for our high risk merchants. We take the role of Merchant “Service” Provider seriously and are committed to providing superior customer service no matter what type of client you are. If you are a Head Shop, Smoke Shop, or provide ancillary services to the cannabis industry we would happy to show you what a fair and reputable merchant service provider could do for your business.
Do your due diligence and call Bankcard Brokers today, or click on “Get a quote” and have one of our ETA CPP representatives call you!