High-risk businesses encounter many challenges with payment processing. Being labeled as this results from the type of industry, higher chargebacks, fraud potential, and compliance with regulations. In addition, companies in this category often pay high fees. Further, approval of payment processing services can be difficult.
These can have a significant impact on your cash flow and financial stability. Let’s review these issues and high-risk payment processing trends influencing the landscape in detail.
High Processing Fees Can Be the Norm
In the realm of high-risk, most businesses can expect to pay higher transaction fee percentages than low risk ones. These charges impact your revenue on a significant scale, especially if these payments are the bulk of your sales.
To avoid paying these high fees, work with a high-risk payment processor that has competitive rates and transparency. You may also receive more help to maximize your profits with merchant cost consulting.
Getting Payment Processing Approval Can Be Difficult
Because you’re high-risk, many payment processing solutions aren’t available for your business. Traditional processors have rules and standards that automatically disqualify your company.
As a result, there’s a limited pool of available services. However, there are processors that focus solely on high-risk. They make the approval process easy because of their experience. They also offer specific solutions to improve your cash flow, like chargeback management and a scalable framework.
Regulatory Compliance Can Be Complex
Many high-risk businesses receive this designation because they are highly regulated. As such, you must comply with these rules or face legal issues or fines.
They could involve adhering to anti-money laundering, data privacy, and consumer protection regulations. Monitoring any changes for these is also necessary. You don’t have to manage this burden on your own.
A well-experienced payment processing partner can help you achieve and maintain compliance. They’ll assist you in implementing practices for data security, including encryption and tokenization. These security methods don’t save credit card details. Instead, they issue a token.
High-Risk Payment Processing Trends
- Artificial intelligence and machine learning: These advanced technologies are fueling better fraud prevention and detection. They’re analyzing data in real time to identify patterns that could be red flags.
- Contactless payments and e-wallets: Consumers desire more ways to pay with mobile as a key component. You can adapt to take these payment types securely to meet the preferences of customers.
- Compliance requirements continue to grow: The regulations you must adhere to today can change tomorrow in this dynamic ecosystem. The best preparation you can exercise is finding a processing partner innovating in compliance automation.
- Real-time payments: Another high-risk payment processing trend is the emergence of payments that settle in real time. You’ll need to consider this payment processing feature to accomplish quicker settlements and meet customer satisfaction.
- Cybersecurity threats are constantly evolving: Cybercriminals find any business that receives electronic payments to be an appealing target. Hackers are always changing how they attack, so you’ll need to ensure you and your processor leverage best practices, such as encryption, tokenization, and authentication.
- Adapting to the buy now pay later (BNPL) demand: BNPL has experienced considerable growth, accounting for 5% of all global e-commerce transactions. Enabling this can be a positive for sales and revenue, but some processors charge enormous fees for this, so do your research.
Be Ready to Resolve Challenges and Leverage Trends in High-Risk with Pinpoint
As a reputable and innovative high-risk payment processor, Pinpoint specializes in helping customers overcome challenges and be ready for the latest trends.
High risk doesn’t have to mean high rates or complexity.
Contact us today to see how we do high-risk differently
