Secure high risk merchant accounts are crucial to maintaining business liquidity. Settlement of payment processing funds ensures a steady source of working capital as well as capital available for investment.
The term “liquidity” refers to how quickly assets can be converted into cash. The most liquid asset is money, in the form of cash. The acceptance of payments through high risk merchant accounts represents a major portion of cash flowing into a business.
The protection of high risk merchant accounts needs be a top priority for businesses. However, few companies have a strategic plan in place to keep payment processing safe.
Many companies have a single high risk merchant account. And are lulled into complacently, believing they are safe. That’s a big mistake.
It’s not prudent for any company processing a lot of payments to rely on a single acquiring bank. For companies with high risk merchant accounts, the potential impact on business operations is particularly significant.
Let’s consider what’s happening in the banking industry.
A high risk merchant account is essentially a short term line of credit that is extended to a business. The economic situation both in the US and throughout the world has caused banks to tighten credit, and less credit is available to businesses.
New regulations, such as the Basal III Accords, are forcing banks to comply with new reserve and capitalization requirements. The banks are reexamining payment processing portfolios, and high risk merchant accounts in particular, to identify potential contingent liabilities.
You may say “Our Company has low chargebacks and minimum fraud so our account is safe.” That’s not necessarily true.
As banks look to reduce exposure to loss, entire high risk merchant account portfolios are being jettisoned by the banks. Accounts within the high risk portfolio with stellar payment processing are tossed out along with the rest of the accounts.
Every day we get calls from companies that have been processing with the same bank for years. These companies have to find new high risk merchant accounts. Fast.
Frequently, companies are told that the bank would no longer process for their business type. Other times, the bank said it was unable to extend additional lines of credit to meet the processing volumes required by the business. Or that the bank was now requiring additional reserves or changing the terms of processing.
We can help many of these companies quickly establish other high risk merchant accounts. Still, it’s much better to avoid being put in this situation in the first place.
Diversification of high risk merchant accounts is the best protection for your business. And the easiest way to diversify payment processing is to gain access to an entire network of banks. Load balance among accounts on a high risk gateway.
You never again have to depend on a single bank for your high risk merchant accounts. With so many banks available for high risk processing, lines of available credit for payment processing are virtually unlimited.
Liquidity is maintained. And your high risk merchant accounts are safe and secure.
Are you interested in diversifying your high risk processing account?
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