Businesses that are classed as high-risk when it comes to ACH (Automated Clearing House) payments may be concerned about establishing an online merchant account, particularly if you are anticipating high-volume payment processing. Being considered a higher than normal risk in terms of ACH can lead to companies being less likely to get the lowest or best rates when signing up for the services of a payment processor.
If you experience high-volume payment processing, then it is a wise idea to work with an experienced internet merchant account provider to ensure that you get access to both hardware and software designed for businesses that are high risk for ACH. Understanding the risks and how payment processors calculate it can make it easier for you to determine the services that will be the best fit for your business.
What are ACH Payments?
ACH or Automated Clearing House payments refer to transfers that are sent between bank accounts electronically. A bank or payment processor will collect and process the information regarding the account, before initiating the transaction. If your business experiences high volume payment processing, then you may benefit from an awareness of how your costs may increase with your risk level, and what you can do to combat this.
Yodlee offers solutions for high-risk ACH payment processing. With Yodlee’s solutions for a more secure and faster way to process ACH debits, such as account verification, you can reduce high risk ACH payment processing in your business and enjoy better rates.
High-Risk ACH Explained
In general, being considered high risk for ACH payments means that your business operates in an industry that has a higher than average rate of transaction disputes and chargebacks. As a result, payment processors may consider your business as a higher risk than others, as they will be liable for any chargebacks, even if they can’t recover the original transaction costs. Some industries are just naturally considered to be higher risk than others, so the fact that you are considered to be high risk may not be anything that your individual company can do much about.
Reducing and Mitigating Risk
There are several options for businesses that have high volume payment processing and want to reduce or mitigate their high risk for ACH payments. For example, offering e-check services or other payment options can be an ideal alternative since these are processed differently and do not have the same restrictions as ACH transactions attached to them. Along with this, one of the main things that any high-risk ACH business can do is work with the right merchant account provider who is prepared to work together with a business of any risk level to ensure that they can get access to the right products and services for them.
When it comes to ACH payment processing, being classed as a high-risk business can leave a negative impact. Understanding how and why your business is classed as high risk, and what you can do to reduce this, can help reduce costs and ensure that you can access the services and products your company needs.