How Bad Credit Affects your Merchant Account Rates

The COVID-19 quarantine has affected how people play, work, go to school, and pay for everything that they need. It has made paying for things online a necessary replacement for face to face interactions, which have become risky. This means that to stay afloat, many businesses need to create or refine their online components with a merchant account and a store.

However, just because you want a merchant account doesn’t mean you’ll get one. If you have bad credit or are in an industry deemed to be “high risk,” it may be more difficult to get a merchant account so that you can conduct payments with your customers online. If you have these issues or issues with high-risk ACH processing, you can use these tips to make it easier to get a merchant account with bad credit.

Discount Rate Tips

Your discount rate determines the fees you pay to your merchant when you process credit cards on your business’s website. If you have bad credit, you may be given a higher discount rate, at least at first. This is because the payment processor considers you a higher risk investment. This can be especially true if you have a bankruptcy on your financial records from within the last ten years.

Getting a merchant account with bad credit is hard but not impossible. you can discuss your discount rate options with your potential merchant account provider before signing. Some payment processors will go easy on you if you’re in a lucrative business. Others may be willing to negotiate your fees if you talk to them.

Are you High-Risk?

You may be in a high-risk industry, which will make it more difficult for you to get a merchant account. High-risk credit card processing and high-risk ACH processing means that in industries (such as gambling or pharmaceuticals), there is a statistically higher chance the payment will be disputed.

If you plan to deal with high-risk ACH processing or high-risk credit card processing, you can mitigate those risks by talking to merchant account prociders that offer services to high-risk businesses.

The Takeaway

Whether you’re trying to make a merchant account with bad credit or navigate the problems of being a business with high-risk ACH processing, discussing your situation with a merchant account provider will help you get the best deal for your site.

Contact Charge.com at (888) 924-2743 to see your options in terms of merchant services and products.