Is there any such thing as a guaranteed merchant account?
Like any good question, the short answer is “It depends.” A question worth asking, an important question, is always going to be a little more complicated than something that you can answer with a yes or no. If you ask “Who should I vote for this election year?” then that’s going to be a question that you can only fairly answer with more questions. When it comes to setting up a merchant account, you’re looking for a long term partner in your business, and that’s not a decision that you go into lightly.
So when you ask if there’s any such thing as a guaranteed merchant account, then we have to ask questions like “Well what business are you in?” and “Why are you considered a high risk merchant?” You can’t make these decisions flippantly or casually, so there’s always going to be a lot to consider.
There are always exceptions, even to a guarantee. So it’s really about whether or not those exceptions are reasonable. Some merchant account providers who focus on the high risk niche will promise a guaranteed account, and then you find out that they don’t cover online gaming, e-cigs, alcohol, guns, adult entertainment or boat and car sales.
But everyone else? Sure. As long as they don’t have an exceptionally high rate of chargebacks compared to similar merchants and businesses in that industry.
So if the short answer is “It depends,” then the long answer, when you ask if there is any such thing as a guaranteed merchant account, is going to be “For you? Probably.”
Guaranteed Merchant Account: Within Reason?
So what does this guarantee “within reason” mean?
The way that a good high risk merchant account provider offers their guarantee is generally going to be something where the offer is open to people who fall within a certain range of acceptability. This can mean any number of things, but generally it is at least going to include the following:
- Your business isn’t just outright criminal. If you’re looking for a merchant account so that you can sell illegal drugs or stolen goods, then you can probably consider the guarantee offer rescinded. This does not mean that any business with an involvement in a sort of gray-area industry is out of the question. When it comes to marijuana, for instance, it is one hundred percent legal in some areas, but many sellers will try to carry the goods over state lines or otherwise involve themselves in less legal areas of the industry. This doesn’t mean that being involved in marijuana trade at all makes you a blacklisted merchant. It might be tricky to get a merchant account from a good brand, but if you’re not a criminal then any reasonable guarantee should extend to your business.
- Your chargeback rate isn’t improbably high. Generally with a high risk merchant account you’re expected to go up to around the two percent mark or a little higher when it comes to chargebacks. At five, ten percent, the guarantee probably doesn’t extend to you. But more importantly, you really can’t maintain a successful business with a chargeback rate that high, so trying to find a good merchant account provider should not be your priority right now. Any higher than ten percent and your business starts to look more like a money laundering operation than a legitimate company. And of course, that brings us back to exception number one. Merchant account providers are here to help you in your business, but they’re not looking to stand at the witness bench at your trial.
- You’re in the wrong part of the world. If you’re working with a high risk merchant account in the United States, then there’s a good chance that they only work with companies in the United States. This is true of merchant account providers in other parts of the world, as well. There are a lot of fiscal and legal complications that only occur when you’re crossing international borders. When, for instance, a Canadian merchant account provider focuses exclusively on Canadian merchants, there’s a lot less red tape that they need to cut through in order to provide a service to their partners. There’s generally not much reason to worry about working with international merchant account providers in the first place, of course. There’s bound to be someone located in your nation of origin that provides the same level of service as any company in any other part of the world.
Who Is Offering Guaranteed Merchant Accounts?
Here’s the thing about a guaranteed merchant account: Vendors don’t go looking for these providers until they’re absolutely desperate. Maybe a few of them just want a company with a streamlined application process. Maybe they just really, really hate paperwork. But for the most part, these are merchants who feel that they’re running out of options. And this brings us to concern number one when it comes to looking for a guaranteed merchant account: Whenever someone is desperate, there will be someone else to take advantage of that desperation.
High-risk merchant account providers already have a bit of a reputation that precedes them. It’s not that you can expect shady dealings from these companies, it’s just that the industry makes it kind of easy for shady dealers to operate. If you do your homework on the companies that you’re talking to, if you check out their business ratings and look over the terms of the contract before signing it, then you have nothing to worry about. But there are some companies in this industry that have a kind of predatory approach to recruiting new clients. It’s important to protect yourself from account providers like these.
This is not to say that all guaranteed account providers are dishonest, or even that most of them are. In fact, it’s a fairly small minority. Maybe a larger minority than you’ll find when it comes to, say, shady low-risk account providers, but it’s not as if one out of every two merchant account providers who focus on high risk and guaranteed approval are bad guys. Just to say that there are sharks out there, so you’ll want to do a little research on these companies before signing anything in order to make sure that you’re in good hands.
This isn’t really any different from any industry where large amounts of money are changing hands. It’s a lot easier to find a dishonest landlord or car salesman than it is to find a dishonest hot dog stand operator. If you work in a high-risk industry then you already know this. People aren’t likely to risk prosecution by filing a chargeback over a fast food meal at McDonald’s, but for a five hundred dollar online poker loss, or a firearm that they couldn’t afford as easily as they thought they could, friendly fraud seems like a solid risk-reward ratio.
Do You Have To Take What You Can Get?
When you’re typing in “guaranteed merchant account,” chances are you already feel like you’re painted into a corner, that your back is up against the wall. It’s true that you have fewer options available to you at this point than another merchant might have. A merchant who is low-risk, or a merchant who is high-risk, but has found a great specialty merchant account provider to work with. These merchants have more options to choose from than you do. But this doesn’t mean that you’re desperate. No matter how dire your situation may look, you are almost never in a position where you have to take the first merchant account provider who will have you.
In fact, we’re willing to bet that on the way to this article, you saw at least a half dozen ads for guaranteed merchant account providers. Some of these ads may have looked more legitimate than others, but the point is that wherever there is a need, there will always be at least a few people trying to meet that need. So no, you don’t have to just take what you can get when it comes to guaranteed merchant account approval.
Obviously if you try to be too picky then you might not wind up getting what you’re after at all. But you still need to apply your smart shopping sense even when your options are relatively limited. Here’s what you need to look for in a merchant account provider that guarantees approval:
- Good customer service. If they provider twenty four seven, round the clock customer help desk service, then that’s a good start. The thing about errors and issues when it comes to a merchant account is that the longer they go unaddressed, the more expensive they get. If you need to get in touch with your account provider, chances are you need to get in touch with them right now, not tomorrow, not at the end of the weekend, but now. And now could be three in the morning on a Saturday night. 24/7 service means that someone will be there to pick up the phone when you need them to.
- A solid reputation. High risk merchant account providers are a niche market, and guaranteed approval is a niche within that niche. This means that not every brand is going to be large enough for a listing with the Better Business Bureau. But you should be able to find some user reviews and ratings of them online. And if you can’t, if they’re like a phantom with no press at all available, then chances are you’re better off keeping your distance from them and looking for a different company to do business with.
- If possible, it’s best to work with someone who specializes in your field. High risk industries often come with certain concerns that are difficult to explain to outsiders. What we’re saying is you don’t want a merchant account provider asking you why a customer at your online casino was unhappy. If you run a gaming site then you know that some people just use chargebacks to buy back a bad hand or as a scam. Most guaranteed merchant account providers will understand this, but you never know. It’s worth talking with them and feeling them out regarding their familiarity with your industry before you sign up.
Here’s something to remember when you are shopping around for a merchant account provider, or, really, when doing anything in regards to your business: It’s probably not as dire as it seems. Scammers and predators take advantage of the desperate. Simply being a smart shopper, weighing all of your options before making a decision, pretty much makes you impervious to anyone who’s looking to take advantage of you so that you can find a reliable, honest merchant account provider with which to conduct your business