High-risk merchant accounts are one of the most crucial trends in the payments industry. Whether you’re a merchandiser, processor, acquirer, or issuer, knowing what’s going on with high-risk transactions can help you stay ahead of your competition and secure new business opportunities. So let’s look at some of the latest trends associated with a high risk merchant account. Here we begin-
Top current high-risk merchandiser account trends-
Here are the top five ones. Check these out-
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More cross-border processing-
Cross-border processing is a massive trend that’s growing in popularity. This trend and high-risk merchandiser accounts allow traders to accept international payments and grow their business while allowing them to accept online orders from other countries. With more cross-border processing options available now than ever, more traders are accepting international payments. And they’re doing so at increasingly high rates.
For example, consider using a third-party payment processor as part of your cross-border strategy if you have an e-commerce store that sells products across multiple continents. And that’s because they can help make this process easier on your end by speeding up the transfer process between countries through their APIs and APIs alone.
The other trend we’re seeing is that merchants are increasingly interested in the ability to accept cryptocurrency payments. It isn’t just limited to those who sell physical goods. Services have also started accepting Bitcoin for their services.
1. Greater reliance on AI and machine learning-
In 2018, the world saw a significant shift in the mode banks used AI and machine learning. Banks depend on these technologies to help them with fraud detection, customer support, and other areas. While this technology has its limitations, it’s significant that traders understand how it works before making decisions about whether or not they want it in their business model.
2. Smaller processors are becoming ISO, acquiring ISO, or getting acquired by larger firms-
You’re getting on to witness this happen super often. Smaller account processors are becoming ISO, acquiring ISO, or getting acquired by larger firms. The reason is simple: smaller high-risk trader account providers can provide services at a lower cost than their larger counterparts. That means they can offer more competitive rates and the same service level as large banks but at a much lower price.
So what does this mean for you? If you want an alternative solution that has access to capital markets, then choosing an ISA-certified institution might be one way of doing this. You should also be aware that many ISA-certified institutions are small high-risk merchandiser processors. That doesn’t mean they won’t provide you with the same level of service as a large processor. It means that you might need to do some research before selecting one. Ensure to ask about their portfolio, past clients, and other services they offer before making your decision.
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Increasing regulatory controls and legislation-
The regulatory landscape is getting increasingly complex. According to a recent report, there will probably be an increase in regulations and legislation. It is becoming a new trend out of the boost in cybercrime. But it also benefits traders because it implies that more customers will shop with them.
There are plenty of new regulations that you need to keep up with:
- PSD2 (Payment Service Directive 2) requires banks and payment providers to provide customers with manageable ways to pay online or at stores
- SCA (Security Content Automation Protocol) allows companies like Google Shopping Express or Amazon Prime Now to deliver services
- 3D Secure 2.0 is another standardization process by which merchants can ensure their site conforms with industry standards when conducting transactions online
- GDPR – General Data Protection Regulation implemented by EU member states requires companies to develop policies around how they handle personal information from users. So they can comply with new laws regarding privacy protection across borders between countries where data may get stored or used outside its perimeters (e-commerce).
It also allows consumers to access their data stored anywhere within those borders, even if it wasn’t collected originally in Europe itself.
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3D Secure 2.0 and SCA-
3D Secure 2.0 is an evolution of the original 3D Secure and is undoubtedly a rising trend. It is a more secure version of 3D Secure, which got introduced in Europe in 2016. And now, it requires authentication when you make a card payment online or over the phone by telephone Order (VOIP).
You can elect to require this form of authentication or not accept it at all, not that you would want to do either one. This new system will likely require merchants who use it to change their strategy for accepting online orders from customers who don’t have valid credit cards on file with them. And this could cause some headaches for merchants who need more time or resources.
3D Secure 2.0 will require a one-time password (OTP) to get sent to the customer’s mobile phone via SMS or voice call. It will probably mean that merchants who accept online orders over VOIP will need to change their processes for obtaining such rulings. Some workarounds can help ease the transition.
High-risk merchant accounts: A boon to big-stake merchandisers-
High-risk merchant accounts are a type of merchant account that allows merchants to accept payments through credit card, debit card, or ACH. Big-stake merchants need to process large volumes of transactions quickly and reliably.
For example, if you run an online restaurant or retail store and have thousands of customers ordering food at once during peak hours, consider opening an account with a high-risk provider.
What makes these types of accounts so important? Because they get designed for businesses that need more than basic processing capabilities when it needs to accept credit cards online (such as fraud protection). And there are specific guidelines for how much money needs to be stored in the merchant’s account before any fees apply.
In addition, most banks won’t offer these types of accounts unless they’re sure there won’t be any problems down the road. That’s because they need more info about what kind(s) of business you’re running. They may ask for your previous tax returns or other financial documents. It is why it’s crucial to do your research before applying for any merchant account.
Conclusion-
The future of high-risk merchant account trends is bright and full of opportunity. As the industry continues to evolve, more and more companies are finding ways to adapt their business models to meet these new challenges. From cross-border processing, greater reliance on AI and machine learning, smaller processors becoming ISO or acquiring ISO, and increasing regulatory controls and legislation, undoubtedly, this year will be another fantastic year for merchants looking for solutions at scale.