Merchant Account for Auto Transportation Services, Auto Repair Services, Used Car Dealers, Engines & Transmissions, Brokers
High-risk merchant accounts are not just meant for businesses that are controversial in the eyes of law. You would be surprised to find out the many deciding criteria that banks and credit card processing companies have to segregate a business into high risk and low-risk categories. When would a high-risk merchant account be a better choice than a conventional credit card account?
If your business is a part of an industry with complicated legislation.
If your business involves large-value financial transactions on a regular basis.
If there are higher chances of large chargebacks in your business.
If you have plans of expansions in the near future.
Most of the automotive businesses like transportation services, auto repair services, used car dealers, engine & transmissions brokers might belong to one or the above category. These are businesses that have a huge potential for consistent growth. These businesses, therefore, need a merchant account that they can blindly rely on. This should be an account that can be sized up or down based on the market trends and the demands. For all such requirements choosing a high-risk merchant account provider is the best solution.
Online merchants might face several more challenges
Consider the automotive business owner who deals with selling auto spares online. This would involve largely sized payments made when there is a card not present physically for the payment. And if the product is to be replaced or returned the refunds would have to be taken care of. Also, for the automotive repair appointments booked online payments are made online and there are chances of the appointments being canceled. In all these situations the merchant account provider should work with multiple underwriting banks to finish the process without any dispute. This is not a feature that is present with popular credit card processors. So high-risk merchant account providers appear to be a better choice for online merchants.
Banks might deny services for such businesses
While most of the banks offer credit card services and merchant accounts for businesses they only deal with simple low-risk businesses. Even if there is a small chance of attracting large chargebacks banks might back off. Some of the credit card processors might place biased rates on such businesses. So you might end up paying a bigger sum to maintain your merchant account than when you open one with a high-risk merchant provider.
Startups OK merchant accounts
While auto businesses face different types of troubles while opening merchant accounts the new businesses find it even more difficult to get the job done. New businesses are under the pressure of getting their merchant account live so that they do not lose any customer. Whether the customer is willing to pay with online payment methods using Visa/Mastercard/Discover/Amex or make a physical payment at a Retail / Card Present / Signature verified case, the business should be ready to accept all forms of payment. This is one major step to be taken by the new business to strengthen credibility. For such level of convenience and to be able to handle even the conventional processing steps like the check drafting and ACH Processing/Check Processing for larger orders high-risk merchant accounts would be handy. These pack all these features into one streamlined account that can be used from the day the business goes live.
High-risk merchant account processing
The first step itself turns out to be in favor of high-risk businesses and startups. The application process can be completed online in most cases. And if there is help required at any point the friendly customer service team would be able to handle it. In the case of most banks and credit card processing companies, there would be a fee charged for the application process. If the application gets rejected after this or if the account gets shut down in future, this fee goes a waste. With the high-risk merchant account provider, you can avail the feature of no application fees so that you would not have to worry about losing your money before you start your business. And the higher rate of approval here gives a positive outlook and a motivation for the new businesses taking their first step. There are plenty of additional features offered to the high-risk merchant account and these are backed up by the secure virtual terminal for payment. So online payments can happen in a secure way reducing the chances of financial data loss.
Offshore merchant account or domestic account?
To begin with, evaluating your budget allotment for the merchant account. If there is no possibility for expanding your budget then the domestic merchant account is the cheapest option to avail. There is always the option to expand and then switch to an offshore account in the future. Domestic accounts are operated in the same country where your business operates. This makes this account more secure and easier to deal with. This type of account is sufficient for small businesses without plans for expansion or international transactions in the near future.
If your auto business is looking for a robust merchant account then an offshore account might be a better option. You get to choose from various locations offered by the merchant account provider. If your clients are situated mostly in a particular region having a merchant account there would make transactions quicker and smoother. This would also make your business finances more straightforward as the global payments are streamlined. Though these accounts are slightly more expensive than the domestic accounts larger sized businesses find them to be cost-effective options.
So the decision here is to be made based on your business size and your business plans for scaling. When you work with a merchant account provider who offers the option to conveniently switch from one type of account to another the transition becomes smooth. It also helps build your rapport with the merchant provider and establish a long term trust.