Before we begin to gaze into the future, let’s define what high risk credit card processing is. There are certain merchants that require a high risk merchant account for several reasons. It could be that there is a reputational risk involved with their products or services. Or the business is in an industry with a history of chargeback problems. There could be a long length of time between buying the service and when it is actually fulfilled. Or a merchant may just have bad credit or poor finances. These merchants would be declined if they went to a local bank and applied for a credit card merchant account. They need high-risk processors that specialize in this variety of businesses.
Throughout the 2000’s, processors were more lenient with high-risk merchants. Much like the mortgage industry, the market tended to be less stringent. Domestic (USA) accounts were easier to apply and be approved for. The Internet was still new and evolving, and e-commerce sites were just starting to really take off. As with all business cycles, markets eventually change.
In 2013, the government enacted more regulations on high-risk merchants and processors, making it more difficult to acquire credit card processing for certain industries. This was known as Operation Choke Point. Offshore merchant accounts became much more valuable to obtain. The requirements were different depending on the country the bank was in. At this time there were many high risk merchants scrambling to be approved offshore.
So what does the future hold? As of the second quarter of 2017, the situation has not changed much from 2013. Some may say it has gotten even harder for high-risk merchants to find processing in the United States. Still there are many merchants thriving and doing well. Business cycles and trends change throughout time. If we look into the past we may be able to see the future of high risk credit card processing. The past shows us that throughout history there are times when regulations increase and decrease. Limitless is very optimistic about the future of high risk processing and predicts that regulations will ease within the next 2 years.
In these uncertain times, Limitless is here to help with all your high-risk credit card processing needs. We are 100% committed to getting our customers approved quickly and easily. So give us a call us at (800) 971-6221 or use the easy apply now form on this page to get started today!