If you are running any e-commerce business, you need the ability to take credit card payments online.
Small startups may indeed be able to get off the ground with a payment service provider like PayPal, but if you plan to scale your business, you’ll need a merchant account as soon as possible.
Unfortunately, finding someone to process your credit card payments can be challenging if your business is labeled a high-risk merchant. There is no uniform, universal policy used to classify whether or not a business is high-risk, but a few common industries almost always fall into that category.
This checklist is designed to help you prepare your documents as quickly as possible when you learn that a mainstream payment processor has denied you. Once your documentation is complete, click here and apply for a high-risk merchant account at Limitless Payment Solutions to keep your business running.
Common High-Risk Merchants
Despite no clear rules on what constitutes a high-risk merchant, we’ve been helping businesses obtain payment processing services for over 10 years and have learned much about the companies we’ve helped grow.
Here are some of the most common businesses labeled high-risk by payment processors:
- Subscription-based businesses
- Kratom sales
- Peptide sales
- Adult products and content
- Travel
- Vape shops
- Firearms dealers
- Nutraceuticals
- Products on the verge of legality (marijuana, paraphernalia, CBD oil)
- Telemedicine
This list isn’t exhaustive. High-risk or low-risk, it doesn’t matter. Limitless Payment Solutions assists a wide range of industries in obtaining payment processing.
Other Reasons Why Your Business is Labeled High-Risk
Even if you don’t fall into a high-risk industry, your business can still be considered high-risk if you have a high chargeback ratio, use certain sales or marketing practices, or if you, as the business owner, have a poor personal credit rating.
Here are four of the most common reasons we’ve found for businesses being denied credit card processing:
- High Chargeback Rate
- Trial Subscriptions
- Negative Option Marketing
- Poor Personal Credit Rating
Payment processors decide whether or not they want to work with a high-risk merchant.
Some refuse to accept any high-risk merchants at all. Others may work with high-risk businesses but charge costly fees to compensate for the risk.
A third, highly skilled group like Limitless Payment Solutions specializes in high-risk merchant accounts and those turned down by other providers.
Approval Process and Timeline for High-Risk Merchants
Merchant service providers working with high-risk merchants have special application requirements.
Because of this, the approval time is typically longer than for other businesses, and the paperwork burden is higher.
The payment solutions provider needs to know as much about your business’s financial state as possible to match you with the right solution.
To speed up the approval process, here is a checklist highlighting the documentation required to get you started.
Checklist for High-Risk Merchant Applications
We should note that the information requested may vary, and additional information not included in this list may be requested before approval.
Completed Application Form
Most high-risk merchant account applications ask for information about your business and all owners.
This usually includes personal and business addresses, phone numbers, website, and email addresses, and tax identification numbers. You may also need to provide copies of the owners’ driver’s licenses and/or passports.
To complete the form, you will need:
- Personal Address
- Business Address
- Phone Numbers
- Website URL
- Email Addresses
- Tax Identification Number
- Owner’s Driver’s License or Passport
- Business Documents
- Copy of Articles of Incorporation
- Copy of Business License
- IRS Form SS-4 to verify your Employer Identification Number or EIN
In addition, you’ll need to supply a copy of your articles of incorporation or other organizational paperwork, and a copy of your business license.
Some payment processors may also ask for an IRS Form SS-4, which verifies your business’s Employer Identification Number (EIN).
Bank Documents
Most merchant service providers require a voided check from high-risk merchants. However, some will accept a letter from your bank showing the business name, account number, and routing number and a statement from a bank official stating that your account is in good standing.
If a letter is needed, the signing official’s name, title, and contact information will also be required.
Don’t forget to include three to six months of recent business bank account statements or statements from your personal bank account if the business is a startup.
You may need:
- Voided Check or a Bank Letter showing your business name, business address, account number, and routing number
- A letter from your bank showing that your account is in good standing
- 3 months of most-recent business bank account statements OR a statement from your personal account if you are a startup.
Financial Documents
Depending on your processing volume, you may need to supply business financials, including your most-recent business tax return.
Some processors may request a complete financial statement with the balance sheet and profit and loss statement.
If your business has processed debit and credit card payments in the past, you’ll also need to supply three to six months of credit card and ACH processing statements.
You may need:
- 2 Years of Personal or Business Tax Returns
- Complete Financial Statement with the balance sheet
- Profit and Loss Statement
- 3 to 6 months of Credit Card and ACH processing statements
- Make Sure Your Application and Documents are Accurate
Never Lie on Your Application
One final thing to remember: it may be tempting to fudge on your application, especially if you’ve been previously turned down.
DO NOT DO IT. Merchants inevitably get caught when transactions are processed, resulting in immediate termination and possibly being placed on the MATCH list or Terminated Merchant File.
Once that happens, your chances of ever getting approved in the future are very slim.
Common Document Errors
- The name on the bank account does not match the name of the address used on your application
- The address on the bank account does not match the address used on your application
- The name or address on the voided check does not match your application
- The signatures on your documents do not match
Stay Organized
- Create a folder on your computer where you store all of your documents
- Rename your document files so that they match the content of that file. E.g. 2018 Tax Returns
PCI Compliance Checklist
You shouldn’t begin applying for online payment accounts until your website is fully functional, ready to make sales and PCI-compliant.
PCI or Payment Card Industry compliance involves a variety of protections to ensure that credit card information is securely stored and transmitted on your site when a sale is made.
Credit card information is vulnerable whenever it is transmitted electronically. Various security measures help to keep it secure.
Here are a few requirements to remain PCI compliant:
- Terms and Conditions visible at checkout
- A Customer Service number is visible at checkout
- Protect cardholder data by installing and maintaining a firewall
- Encrypt transmission of cardholder data across open, public networks.
- Use and regularly update anti-virus software
- Regularly test security systems and processes
- Maintain a policy that addresses information security
For more information, check out a complete PCI Compliance Checklist for Websites.
Need Payment Processing Approval? Apply Now with Limitless Payment Solutions
Just because your business falls into a high-risk niche doesn’t mean you should settle for subpar service and a poor relationship.
Limitless Payment Solutions has over 10 years of experience providing high-risk merchants like kratom and peptide businesses with payment accounts so they can operate their businesses and accept online payments.
Whether you need one account or multiple, Limitless’s experts will work with you to obtain the documentation you need and approval as quickly as possible.