Your transactions are processed through Automated Clearing House (ACH) by financial institutions that offer such services. The bank’s job is to take payments from your buyers and deposit the funds into your merchant account. Therefore, ACH processing is very important for your business.
When applying to get a merchant account, your provider should inform you of the different classifications depending on your industry. One of them is high risk ACH processing which is meant for merchants considered high risk and can’t acquire a merchant account like any low-risk business would. High risk businesses include tobacco and e-cig sales, adult products, online gambling, and internet auction platforms among others. Most online companies typically fall under this category because they have higher chargeback rates and are prone to fraudulent activity.
Many startups go for high risk ACH processing after being rejected by banks because their businesses fall in the list of prohibited industries. Because of the risks involved in such businesses, you won’t easily find a service provider, and if you get one, they’ll most likely charge you very high fees per transaction.
For that reason, most high risk companies prefer Offshore credit card processing because it offers several benefits. For example;
- you’ll enjoy quick payments— you won’t wait long to receive funds,
- More processors will be willing to work with you,
- you get to accept more card types,
- you get to accept foreign currency,
Many financial institutions will readily work with offshore credit card high risk ACH processing, even if local banks reject you.
Also, when choosing a provider, be sure to get the details of their insurance and coverage. Sometimes offshore banks may not offer the protection you enjoy with the financial institutions covered by FDIC.
The bottom line
Every entrepreneur must conduct thorough research to find out what options they have before choosing a payment processor and putting pen on paper for a merchant account. Working with the wrong provider may mean extra hefty costs that could lead to closure of the business.
Business Funding expert, Nathan Hale, founded First American Merchant with his eyes set on helping the backbone of our country, small business owners. His passions include writing/producing music, and travel. First American Merchant is America’s Best high risk ACH processing company, serving both traditional and high-risk Businesses