Payment processing for high and low-risk businesses differs a lot and it has to be considered when choosing a processor. A business is labeled high-risk if it is more likely to experience fraud, chargebacks, and returns. Thus, for such industries, the processing company must be reliable and secure.
High-risk processing companies are capable of handling the tasks. They specialize in supplying advanced anti-fraud and anti-chargeback software and understand the requirements of such industries. In this article, we will dig deep into the high-risk category and its challenges, help to understand whether the company rises to them, and show you the five best high-risk processing companies available in the market:
High-risk Processing Challenges
Each business goes through risk evaluation at the stage of opening a merchant account. If it is increased, the business is considered high-risk. There are business models that fall into this category such as Forex, gambling, gaming, cryptocurrency, online dating, etc. Unlike a low-risk business, a high-risk industry sets additional challenges for processing companies. There are two major issues:
Increased probability of chargebacks
A chargeback is a reimbursement of payment initiated by the customer through the request to the issuing bank. Commonly, the client wants to return the money after the payment has already been made, which means that the services have already been provided. In high-risk industries, it happens more than usual.
Chargeback carries a risk for merchant services providers because the return of funds is made at their expense. That is why the chargeback is more costly for the high-risk merchant. On top of that, to provide the reimbursement to the client a merchant needs to waste additional time and resources without further payment. The benefit of choosing the right high-risk processor is that they are equipped to minimize chargebacks.
Higher risk of fraud;
Fraudulent transactions are those that were not authorized by the cardholder. Although fraud may occur in any industry, businesses with a high level of risk are more likely to experience them. Additionally, high-risk e-commerce accepts card-not-present transactions, which by themselves are considered less secure than card-present ones. They cannot be checked for compliance with the owner’s data on the spot.
Fraudulent transactions often are the cause of chargebacks. Fraud frequently takes place when credit card data is stolen, yet unreported. The cardholder discovers a write-off after the fraudster pays via his card and requires a refund by initiating a chargeback. Although the return of funds itself does not take much time, the process of verifying transactions for their validity is complicated and carries reputational losses for merchants, which results in higher network fees. To avoid the negative consequence, the merchant needs to open an account at a high-risk processing company, which has high-power anti-fraud filters.
What to Look For in a High-risk Processing Company
Realizing that high-risk processing comes with its own set of challenges, merchants may find it challenging to find a trustworthy processor. However, there are processors that specialize in high-risk industries. There are many ways that professionals differ from amateurs who simply want to earn money on your business without offering quality services in return.
1. Chargeback prevention tools
The prevention of chargebacks should begin before they occur. Reliable high-risk payment providers have a range of tools that identify a questionable transaction that may result in a chargeback. They set a PCI-compliant payment gateway to check the address of the customer, Card Verification Value (CVV) compliance, and 3D secure technology.
One more step towards the prevention of chargeback is monitoring. Since the client’s application for a refund goes directly to the acquiring bank, the merchant often discovers that after the return of money has already been made. Processors have special programs which identify chargeback applications and notify the merchant so he could resolve the problem at the initial stage.
2. Fraud protection
Any high-risk industry needs proper protection from fraud. Many systems identify suspicious transactions. Among them are preventing transactions from questionable IP addresses, client’s identity verification during the payment process, and blocking IP addresses from specific countries. They also use IP Whitelisting and Blacklisting, where whitelisting is the provision of access to certain IP addresses and blacklisting is a method to block illegitimate or malicious IP addresses from gaining access to the network. One more fraud prevention tool is Velocity checks, which is the monitoring of the number of transactions from a given IP address over a certain time.
3. Customized payment management
Another indicator of a trustworthy payment processor is that he has different solutions for various high-risk businesses. For instance, a gambling merchant account would require recurring billing support, while a cryptocurrency merchant account does not need it, but requires money laundering protection. That is why payment processor has to meet the requirements of various high-risk industries, offering customized payment management.
The Best High-Risk Payment Processors in 2022
Knowing what to point out when selecting a payment processor, all that is left is to compare the offers on the market with the requirements of your industry. Let’s examine the five best high-risk processing companies of 2022:
1. Ikajo
Ikajo is a reliable payment processor operating on the market since 2004. Over the years, the company created multiple payment solutions. Now its range of acceptable industries includes nearly every high-risk business. Ikajo provides individually customized solutions for those who are not on the list as well. In addition, the company provides merchants with over 100 payment methods with local ones among them and has more than 60 proven banks relationships, including European, Chinese and CIS-based banks. Ikajo provides payouts worldwide. The process of onboarding for merchants is swift and smooth. The company has API rest/API soap and HPP integration. Ikajo has developed a solution against fraud and chargebacks called Charge Advisor, which has the capacity to protect high-risk businesses from fraudulent activity.
Specifics of the infrastructure:
- PCI DSS 1st Level compliance;
- Certified by PCI 3DS (1.0 and 2.0);
- Over 100 currencies;
- Chargeback and fraud prevention;
- Free recurring billing;
- 24-hour customer support;
- Mobile banking.
2. PaySpacelv
PaySpacelv is a card transaction technical processor that specializes in processing payments for high-risk merchants. The company provides advanced full-scale anti-fraud tools to minimize the costs of fraudulent transactions for merchants. There also is a special system that predicts and reduces chargebacks. Furthermore, if a chargeback has already occurred, PaySpacelv assists merchants with professional dispute management services customized to each specific case. Also, the company assists with receiving PCI DSS certification for high-risk businesses. PaySpacelv has a smart recurring billing feature, allowing for multiple retries, and manages frictionless transaction flow within a payment gateway. Its smart payment routing lowered transaction decline rates by increasing the proximity of issuing and acquiring banks. The company offers multiple payment methods, including alternative ones, and works with all major credit card brands worldwide.
Specifics of the infrastructure:
- PCI DSS 1st Level compliance;
- HPP, API, and MoTo integration;
- Over 80 currencies;
- 3D and non-3D-secure transactions processing;
- Flexible pricing starts at 1.2%;
- Fraud and chargeback prevention;
- Assistance in disputes.
3. Secure ePayments
Secure ePayments has flexible and secure processing solutions for different types of high-risk merchants. The company operates various payment methods, among them are local payment methods, Closed Loop wallets, payments in cash and cryptocurrency. There are more than 350 alternative payment options. Secure ePayments has an advisory team ready to assist the merchant with professional consulting services. Its solutions are customized for different business needs. For instance, gambling is prohibited in some countries. Secure ePayments has systems that block IP addresses from them, protecting the merchant who uses gambling merchant accounts from breaking the law. The company’s fraud protection is multifaceted.
Specifics of the infrastructure:
- PCI DSS 1st Level compliance;
- Access to over 100 providers of card processing;
- IBANS in over 50 currencies;
- Single API to access all payment methods;
- Customer Service and Operations;
- 24-hour customer support.
4. Flutterwave
Flutterwave is a payment processor that has solutions for various business industries. The processor offers over 150 currencies and multiple payment channels for merchants to accept payments and grow their business beyond borders. It also accepts local payment methods. Flutterwave’s payment system is secure and protected from fraud, and the data has end-to-end encryption. The company supports KYC verification which allows verifying customers’ identities in one call. There is an option of one-time payments as well as recurring payments through a payment plan or through a card token integration. Flutterwave has support ready to assist and answer all merchant’s questions. The company has built-in compliance.
Specifics of infrastructure:
- PA DSS & PCI DSS Compliant;
- Over 15 payment options;
- API integration;
- SDKs and Plugins;
- Accepts EMV chip and QR payments.
5. Total Processing
Total Processing is a processing company founded in 2015. With no ties to any acquirer, a company offers adapted merchant account solutions that meet the different requirements of business industries. Total Processing has chargeback protection as well as pre-checks customers’ accounts for sufficient funds before authorizing payment. Due to its active partnership with banks, the company could streamline the approval process for a merchant. Total Processing has a CRM dashboard with a complete overview of the merchant’s commercial activity. It supports various payment options, including telephone payments, Apple Pay, and many other solutions. The process of integration for the merchant is assisted by payment engineers and developers.
Specifics of infrastructure:
- PCI DSS 1st Level compliance;
- Fraud and chargeback protection;
- 198 payment methods;
- Enhanced Reporting;
- Recurring payments;
- Risk management.
Conclusion
Although high-risk industries have certain challenges, the right processing company is ready to meet them and has professional instruments. Among them are advanced fraud and chargeback prevention and customized payment methods. Select the processing company that answers the call of your industry and benefit from its capabilities!
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