5 Cornerstones of Managing Your High-Risk Business – By Heather Petersen

by Colleen on December 29, 2014


Learn what makes a business high-risk, how to process with the right partner, prevent common problems, and avoid fraud. feedfront-cover-29-188x240

When it comes to high-risk processing, I’ve met many merchants who aren’t aware that they fall into the high-risk category, and many ISOs who don’t know how to handle high-risk merchants. If you’re not aware that you’re high-risk, how can you mitigate the risk associated with high-risk processing? Here are five easy tips to assist you.

1. Know what makes a business high-risk.

The Card Brands, banks, and government municipalities have outlined criteria that categorize certain business types as high-risk. Criteria is as simple as “business has a high chargeback ratio” to complicated parameters regarding age and geographic restrictions.

The key to managing the risk associated with these business types is to understand exactly why you’re high-risk and build a processing game plan for mitigating that risk.

2. Find the right processing partner.

Find the right processing partner that is experienced in handling your type of business. Make sure the sales agent and ISO that you work with are Certified Payments Professionals (CPP™). This certification signifies that an industry professional has the expertise required to provide excellent merchant services.

A list of CPPs is available on the Electronic Transactions Association’s website. The right processing partner will coach and consult you about the best products and services for your business. A merchant services provider that specializes in high-risk accounts will stay proactive in notifying you of protective measures, fraud prevention programs, and the condition of your merchant account. This partnership can benefit your company immensely.

3. Understand the common ramifications associated with high-risk processing.

Oftentimes, with high-risk merchants, the processing develops patterns. The ability to foresee possible risks associated with your business is a skill that’s fine-tuned with experience.

With high-risk merchants, there’s always probability for chargebacks, returns, and customer dissatisfaction. Knowing the risks and difficulties your business may face allows you to take the necessary steps to prevent these predicaments.

4. Know how to reduce and prevent the problems associated with high-risk processing.

Using the tools and knowledge around you can prevent and repair processing problems, and reduce associated risk. Consult your sales agent and ISO about preventative measures. Whether solutions that overhaul the customer service process, integration with fraud prevention services, or even working directly with your ISO and sales agent to improve your business model, the precautions taken to mitigate risk and decrease potential complications can allow you to continue processing smoothly.

5. Know fraud when you see it.

The trick to managing your high-risk business is to operate by the book. Industry veterans created standardized guidelines that regulate the high-risk world. Work with your ISO and sales agent to stay proactive. Keep a negative database to cross-reference your customers’ IP addresses, emails, phone numbers, and other information that keep track of your website visitors.

Frequently check your transactions on your gateway. If you’re getting a lot of declines, you may have a problem. Be aware of suspicious patterns, and learn how to protect your business.

Heather Petersen is CEO of National Merchants Association, a merchant services provider specializing in high-risk.

This article appeared in issue 29 of FeedFront Magazine, which was published in January 2015.http://issuu.com/affiliatesummit/docs/feedfront-29

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