June 12, 2020

3 Fundamentals for Thriving Online as a High-Risk Business

It’s a cutthroat world out there for online businesses—especially ones categorized as a high-risk business by banks. If you’re running a card-not-present enterprise (so, anything in the world of ecommerce), you’ve already got the high-risk denomination stamped on your forehead by merchant service providers everywhere.

Every veteran high-risk business operating online shares three fundamentals in common that have helped pave their road to success. If you invest the necessary energy and resources to build upon these fundamentals, your future will look bright.

Fundamental #1: Cultivate a Great Relationship With Your Processor

It’s a pretty simple concept: If you have a steady payment processor, you’ll be able to comfortably facilitate customer transactions on your website. If you don’t, your revenue stream can be cut off at a moment’s notice—leaving your customers frustrated and your coffers empty.

Anyone reading this piece likely runs a business that falls under the “high-risk” umbrella, a designation that demands extra legwork to keep your merchant provider happy. Not to mention, most major banks and processors won’t even help out such companies with their banking needs. Figuring out how to set up your high-risk merchant account and then keeping it open are tricky (yet necessary) parts of surviving in a high-risk industry.

Here are three crucial steps that will help ensure your account gets opened and stays open for the foreseeable future.

Be Transparent

There are several important things to consider during the merchant account application process, but being transparent is number one. Keeping your financial records, tax documentation, licenses, and everything else necessary to run a business in neat-order is essential. Your files will be scrutinized more than if you were a normal merchant, so don’t try and pull any quick ones.

Don’t Push for Higher Volume

You’re going to get set with a lower-than-average processing volume during the first few months of working with your high-risk provider, plus the rates will be less friendly than if you operated out of a brick-and-mortar store (since businesses making in-person sales are generally deemed lower risk than ones online). That’s okay. While you don’t want to take abuse from a payment processor, understand that you have little leverage during those early days of working together.

After half a year of consistent, transparent business operations, you can push for a higher volume. Later on, you’ll even be able to renegotiate your rates. With a bit of patience and an increasingly positive track record, you’ll be in a better position to hold onto your merchant services, and even make them work better for you.

Keep Chargebacks Low

This may be step three here, but maintaining a low chargeback ratio (1% or lower) is the best way to keep things peachy with your provider. Unfortunately, Visa’s chargeback guidelines and MasterCard’s chargeback guidelines aren’t identical, plus your payment processor will have a say in what’s acceptable and not.

Keeping your chargeback ratio at a manageable level is easier said than done, too. There are a variety of things that will help though, such as:

  • Stellar customer service
  • Providing a great, non-buggy product
  • Being honest, both through your customer service channels and on your website

However, embracing all of these still won’t guarantee protection from a pummeling at the hands of the chargeback monster. This brings us to our next fundamental part of running a successful high-risk business.

Fundamental #2: Invest in Chargeback Management

Deal with chargebacks like a pro, and you’ll be in a great position to grow other areas of your business. You can do this by putting some time (and money) into creating a fluid and comprehensive chargeback management system.

Use Software from a Provider or Third Party

Most merchant services providers will supply some form of a chargeback management system when you sign up for processing—especially those who specialize in high-risk. Be sure to ask them about it!

Being able to address chargebacks quickly is critical, and processors can often help you resolve these situations with customers. Be sure to intimately understand whatever chargeback solutions they offer, so you are comfortable using them when the need arises.

Unfortunately, no amount of software can protect you from every fraudster out there. However, technology can help you combat cases of friendly fraud and maximize your chances of keeping your ratio at a passable level. Using it is in your best interest.

Strengthen Customer Service

It’s unfortunate, but some chargebacks are simply due to clerical errors (and thus avoidable) but that’s where having a knowledgeable, well-trained staff comes in. Establishing round-the-clock support that’s well versed in your company’s policies (who also know how to handle customer complaints with tact) is crucial.

If you can’t afford that 24/7 service at this point, make sure it’s extremely clear when a customer can contact you or your support staff on your website. It’s not practical to run a high-risk operation without some form of customer service, so do what you can to provide effective help for those in need. Simply having a person on the line is sometimes all it takes to keep a customer.

Know Best Practices

As a business owner, it’s important to have a grasp of widely recognized best practices for minimizing chargebacks, so you can pass them on to your employees. Some examples include:

  • Fighting chargebacks when you have evidence in your favor
  • Making sure your brand is recognizable on the credit card bill and receipt of customers
  • Sending emails to customers immediately after purchase (with a receipt attached)
  • Handling chargebacks promptly, rather than letting them sit around

Some savvy entrepreneurs have taken caution to another level, requiring customers to sign an e-form or even fax their signature before allowing them to proceed with a purchase. If you’re really worried about people committing credit card fraud, this is a potential strategy you can use to safeguard yourself.

Fundamental #3: Emphasize that Your High-Risk Business is Legitimate

Scared customers are dangerous for business. If they’re worried that your company just scammed them, you’re in trouble. Forget about chargebacks—negative reviews, blog shellackings, and disgruntled online consumers can take you down without any help from the bank.

You need to prove to everyone who has purchased your products, landed on your site, or even simply heard about your business secondhand that you’re running a legitimate operation. The first big part of doing so is to:

Have an Aesthetically Pleasing Website

When a customer lands on your website, they’ll immediately make a snap judgment about whether your business appears legitimate or not. Websites that are listed by search engines or internet browsers as “Not Secure” can raise red flags from visitors and cue them to instantly exit away from the site. In addition, instances of a broken Adobe Flash Player, poorly optimized images, an outdated homepage, poorly formatted web pages, and erratically colored text, for example, can also lead visitors to the same conclusion.

Aesthetically pleasing websites that instill trust in visitors, however, have a secure rating from search engines and internet browsers, have contact information clearly visible or easily accessible, and also have a reputable looking logo. Having these elements on a website gives it a sense of professionalism and prompts the visitor to trust the website.

To create a trust-instilling website, you’ll still need to invest energy into organizing your website, put together compelling content on your blog to drive traffic, and create a checkout funnel to turn visitors into customers, but with a bit of effort, your site will look clean and more importantly, legitimate.

Build a Social Media Presence

You don’t need everything down to a Pinterest account for your business, however, having a personal LinkedIn profile and a company Facebook page is a good start. Even creating a Twitter account to get your brand a bit of visibility can be helpful when leveraged right.

You’ll likely not have the same social media presence as major businesses, but if you reveal a bit of personality on your social accounts (while also highlighting your products and getting your name out there), you can start strengthening your brand in a major way. Plus, when people go looking for your company online before clicking the “Buy” button, they’ll be reassured to see that you’re active on these platforms.

Be Easy to Contact

This ties back to the point earlier about customer service, but it can’t be overstated: When a customer wants to reach out to you before (and especially after) a purchase, you need to make sure they can do so easily.

A company phone number with business hours should be placed somewhere at every stage of the checkout process: In your website’s footer, on receipts, and even in the signature of your automated emails. Then, you must make sure you or your customer service representatives are prepared to field calls during those time frames.

You can also try integrating a piece of supplementary software like LiveChat, which allows customer service representatives to instantly send canned responses to users. Many customers ask similar questions, so being able to automatically support a portion of your in-need clientele without lifting a finger is quite useful.


In order to survive and grow your high-risk company, you need to have a solid foundation in place. And if you adhere to the three fundamentals outlined in this piece, you’ll be well on your way toward establishing that foundation. By combining this base with a bit of consistency and professionalism, you’ll be setting yourself up for success well into the future.

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