With regards to the ticket value of products and services, a few industries just normally have higher costs than others. As a rule, a business that offers shirts will have very low individual order charges than an organization that offers high-end products that can luxury watches, smartphones or any premium products. Apparently, this appears quite evident, but what isn’t always as immediately evident to the business owner is the way this shapes how a credit card processing company will view them when they apply for a merchant account.
Payment processors are careful about organizations that have high average transaction charges. To you, these high value transactions speak to profit – yet to the credit card processor, they speak to risk. High-value charges are critical risks for your financial organization in two different ways: first, if your client is unsatisfied for any reason, the probability that they’ll make a move is straightforwardly corresponding to how much cash they spent. A client who burns through $10 on a grocery store may very well shrug it and proceed onward on the off chance that you make a mistake with their request. That is a much less likely response on the off chance that they’ve spent thousands of dollars on a precious ornament.
The second reason high-value transactions are risky for processing organizations is the likelihood of fraud. Envision an identity thief steals a customer’s credit card number and personal information. It’s significantly more likely he will utilize that card to purchase high-end products and other premium merchandise, as opposed to a Venti Latte. Large buys of costly items give fraudsters the greatest value for their money, and in this manner, those transactions tend to raise the most eyebrows with payment processors.
Obviously, entrepreneurs aren’t unconcerned with worries about chargebacks and fraud, either. So what would you be able to do to lighten these issues? That depends to some extent on your industry. If your normal sales transaction is less than $1,000 and you all of a sudden get an order that is very greater than your average sale, it may be astute to ask for an alternate type of payment or – painful as it might be! – to deny the charge outright. Organizations that consistently deal in high–ticket-value items simply exist in an environment of greater risk, and while there are steps you can take to reduce the risk of fraud, you can’t eliminate that risk entirely, or even bring it down to the level of business with smaller-scale charges.
At last, this means you will have a harder time finding a payment processing company willing to offer you a merchant account, and a large portion of the ones who will work with you will do as such with risk management on top of mind. One thing you should take care to stay away from is low-balling your evaluated ticket size and month to month volume. Credit card processing organizations ask on their merchant account applications about your expected average transaction size and month to month charge total , if you consistently surpass the values you evaluated by a substantial edge, you could discover your merchant account suspended or even for all time shut down, which will make things considerably harder for you going ahead.
Regardless of this, high– ticket merchant account holders aren’t destined for excessive fees in order to do business. Some payment card processors will negotiate with organizations in high-risk fields and achieve terms that recognize the risk included yet at the same time work for the merchant.
Example of high ticket items is as follows.
- Collectible items such as vintage or memorabilia or very rare items
- High-end electronics
- Fine jewelry and jewelry with precious metals
- High-end furniture
- Technical support including Marketing and SEO services
- Automotive including auto accessories, parts, and services
- Travel booking
- House or Car
- Luxury goods such as couture clothing, custom-made accessories and designer luggage
- Luxury services like a private plane or yacht travel
Factors to Consider When Looking For a Suitable High Ticket Merchant Account
- Chargeback threshold set by the merchant account provider – It is important to determine if the chargeback threshold is based on the number of chargebacks filed by the customer or by the total dollar value of the chargeback. Chargeback threshold based on the dollar value is not suitable for high ticket business because transaction in this type of business has high priced value and may limit the number of chargebacks that a business may incur per month.
- Find a High-Risk Merchant Account Provider through brokerage –a brokerage service may be useful to find a high ticket merchant account provider since the brokerage service will give the merchant a list of reputable providers with good track records and fair policies. Their past experience with similar clients can be helpful for them to direct the merchant to providers that can best suit the business needs.
- The High Risk Merchant Account Provider must have a higher monthly credit card processing volume cap. Because the said cap limits the number of credit card transaction a business may take.
- Ability to provide various payment solutions to all types of high ticket business whether it is new or established already.
- Look for high risk merchant that can provide lower rates and fees for large ticket transactions and also provides security solutions for handling sensitive payment data.
Nowadays, Visa, MasterCard, and Discover have their own large ticket programs with various interchange rates and a different set of requirements for merchants.
Visa offers a large ticket interchange rate of 1.45% and $35 per transaction for transactions amounting to more than $5,000 which is a lower effective rate. For MasterCard, they qualify large ticket transactions for transactions above $7,255 and the accompanying interchange rate is 1.25% and $40 per transaction. The most recent company to implement the large ticket program is Discover which has so far, the lowest fee for both the interchange rate at 0.90% and the per transaction fee of $20 for large transactions of $5,000.
It may be challenging to set up a merchant account for c since they are considered as high risk. Thus, providing and complying with the basic requirements set by merchant account providers is a must.
What occurs during the underwriting process
Reputable, law-abiding businesses are destined to get approved for a high-ticket merchant account. Amid their surveys, underwriters want to guarantee companies are based on stable business models and in compliance with all rules and regulations.To decide risk, underwriters audit merchants’ credit scores, credit card processing history, bank statements, and websites. These are assessed to ensure that merchants don’t have a history of high chargeback ratios, outstanding bills, negative bank account balances, and a previously terminated merchant account. Also, a travel merchant’s website is analyzed to guarantee it has a secure (SSL), and in addition clear, prominently shown privacy and refund policies.
Some savings and no outstanding bills or obligations will put a merchant in a positive light. Additionally, it is a smart thought to have the business principal with the best credit history apply for the merchant account. Businesses that take these steps are bound to get approved for merchant accounts without limitations, such as, higher processing volume caps and lower rolling reserves.
We provide high ticket merchant accounts for the following:
- If you have been Previously rejected or discarded by another processor, we can help you get back on track
- Startups and existing businesses – we help all types of businesses
- High ticket merchants and merchants with bad credit
Getting higher credit processing volumes for high-ticket merchant accounts
Because of the financial risk related with high-ticket businesses, many are given merchant accounts with the month to month credit card processing volume caps. This implies merchants are just allowed to deal with a specific number of credit card transactions every month. When the cap is achieved, a merchant can no longer take credit cards as payments during that month. Online organizations that rely upon customers paying with credit cards, fundamentally should quit taking sales until they reach the next month.
Caps, in the end, get lifted for most businesses. High-ticket merchants that require higher processing volumes can ask for new caps in as few as three months. Around then, they should prove that they pay their bills, have low chargeback ratios, and have some money saved.
High-tickets equal high chargeback ratios
The reason high-ticket merchants see exorbitant chargebacks is really basic. The risk of loss is higher if a customer charges back a $3,000 deal than a $30 deal and purchasers are more likely to alter their dispute a transaction when item or service is more costly. When chargebacks include, it isn’t uncommon for a merchant to go belly up. If a merchant shuts down out of the blue or just vanishes, processors and their support banks are the ones left responsible for the hefty chargeback fees.
Merchants that sell costly products also are more defenseless against fraud. Cybercriminals target high-ticket merchants. It isn’t exceptional for them to utilize stolen credit cards to purchase gems or electronics and afterward have them dispatched to the United States and after that rapidly have them re-delivered to another location overseas. The merchant, processor, and its support bank are in charge of refunding the product or the cost to the purchaser.
There also is friendly fraud, which is when clients purchase things, get it, claim it was defective, did not arrive, or was not what was promised, and then, calls their credit card companies to dispute the charges. Fundamentally, clients end up getting the product or service for nothing.
Above all, it is essential that merchants disclose to processors in advance that they sell products and services that have higher-than-normal price tags. Subsequently, merchants will get approved for an account that can suit those reaches. High-ticket merchants that neglect to do this can end up having their merchant’s accounts suspended or close down for all time on the grounds that their business activities look sketchy.
Ways to keep chargeback ratios low
High-ticket merchants should be vigilante with regards to avoiding excessive chargebacks. Merchants that consistently bargain in items with high-ticket values can’t eliminate the risk of fraud totally because of the business sectors in which they exist, but little changes can help. A strong business model and clear return and refund policies aside, organizations that offer increasingly costly things need to raise the stakes as far as fraud prevention.
One great approach to eliminate fraud, which at that point prompts disputes and chargebacks, is to include an identity check purchasers before they submit transactions. Executing an electronic ID confirmation at checkout is a straightforward and financially savvy solution. Asking customers to email a selfie of themselves holding a driver’s permit or another type of ID is another approach to demonstrate a buy was valid.
- Other good practices include:
- Altogether checking on any orders that appear questionable
- Getting a digital signature from customers who are making the purchases
- Avoiding sales from nations that are known for internet fraud
Also, when high-ticket merchants acknowledge MO/TO (mail arrange/telephone order) or online business payments, the client’s credit card data is entered through a payment gateway or virtual terminal. Utilizing a gateway, a UI that transmits card information to the processor safely, is an incredible method to eliminate credit card transaction disputes. Merchants also can eliminate a substantial volume of chargebacks if they use ACH, or Automated Clearing House, payment processing, and also other check solutions. ACH is an electronic payment solution that empowers businesses to deduct reserves straightforwardly from a client’s bank account.
Other critical moves to make are including clear charging descriptors, which incorporate a merchant’s name, contact number, and return and refund policies. This is profitable in light of the fact that so many chargebacks are because of clients not recalling or perceiving transactions on their credit card statements.
Communicating transparently and regularly also can go far in any high-ticket business in any industry. When a transaction is finished, send an automatic electronic confirmation or receipt. If a dispute arises, stretch out beyond the circumstance by training staff to offer full refunds. A discount is less expensive than a chargeback. Such a large number of chargebacks not just cut into net revenues, they can prompt processors closing down merchant accounts.
Merchant Cash Advance for Automotive & High Ticket
A typical issue for a high ticket or high average transaction industries is finding a merchant services provider that will process your electronic payment processes. The risk from high ticket value transactions will frighten away plenty of traditional banks and service providers.
Dealing in high-end, high-priced items?No need to worry, we’ve got you covered. We offer a variety of merchant processing accounts set up specifically for the high-ticket industries.
We have no transaction limits or restrictions for our programs.
- No Application Fees
- Competitive rates
- No VISA/MasterCard Required
- Multiple Secure Payment Gateway Options
Good Practices for High Ticket Merchant Accounts
- High ticket merchants must have a solid business model accompanied by clearly stated policies for return and refund to help lessen excessive chargeback.
- Must be actively trying to eliminate fraudulent transactions by verifying the customer’s identity before submitting the transaction by implementing online identity verification during check-out.
- Conducting an order review to check if there are orders that appear questionable.
- Requesting for the digital signature of customers that makes purchases.
- Restrict sales from countries that are known for high internet fraud.
- Billing descriptors for the transaction must be reflected in the billing statement of the customer including the merchant’s name and contact number to avoid chargeback that is caused by the customers not recognizing the transaction.
- Provide excellent customer service by responding to customer’s phone calls and emails easily giving the customer a positive customer service experience. Because customers who invest in high ticket purchases have greater expectations and are more likely to dispute even for the smallest reason.
- Clear and detailed product or service descriptions must be provided and disclosed to the customer to avoid customers’ dispute.
Additional benefits of the high ticket business merchant account:
If you get a high ticket merchant account with IPAYTOTAL, then you will also be eligible for other benefits that we offer, the best solutions for e-commerce businesses. We guaranty quick real-time credit card processing, top-notch services and at reasonable rates. Give us a call at +44 800 776 5988 or get in touch with us through our website. Businesses can receive the following additional benefits:
- Competitive rates
- Acceptance of multiple currencies and deposits
- Compatibility with major gateways and shopping carts
- Accept Visa / MasterCard / American Express at your store
- Integration assistance with more than 100 shopping carts
- Chargeback prevention tools and advice
- eCheck processing
- Our gateway comes with the industry-leading fraud detection and prevention tools