eCommerce stores may not be what many people imagine when they hear about “high-risk businesses,” but most eCommerce stores fall in that category purely by virtue of all the risks of fraud, chargebacks, or transaction declines that come with online payments.

Especially for businesses that have to deal with large numbers of payments of varying amounts, having a high risk eCommerce merchant account can easily be seen as a must, even if you are not used to looking at the business as one that is “high risk.” If you’re not convinced, here are some of the main reasons why some eCommerce stores need high-risk merchant accounts.

6 reasons why an eCommerce store might need a high-risk merchant account

1. Detect and prevent fraud

Online fraud is everywhere and pesters almost everything we do on the internet. However, aside from the darker corners of the world wide web, fraud is arguably most prevalent on and around eCommerce sites. There are lots of different kinds of fraud that eCommerce businesses have to deal with, too, especially in the more high-risk niches.

Hacks and data breaches, identity theft, credit card fraud, online shopping scams, malware, and other types of fraud can all be a problem for an eCommerce store, especially without a good payment gateway. This can not only lead to major financial leaks off your potential revenue stream, it can drastically erode trust in your store and overall brand.

The right high risk eCommerce payment gateway can help change all that, however, as it ought to have good fraud detection and prevention tools that deal with fraud attempts as often and as effectively as possible.

2. Reduce chargebacks

Another typical payment issue eCommerce sites face is chargebacks. Those can sometimes be accidental, but are often fraudulent in and of themselves. Whether fraudulent or not, chargebacks are both yet another dent in your revenue, as well as a serious smear on your business’s reputation that changes how your partners and bank perceive you. As a matter of fact, frequent chargebacks in a given niche are one of the main factors for dubbing it “high-risk” in the first place.

Fortunately, the right high risk eCommerce gateway can be as effective at preventing chargebacks, as it is at preventing other types of fraud. With the right AI-powered detection algorithms, proper encryption protocols, and strong transaction security, a good payment gateway will reduce the number of chargebacks your eCommerce store has to deal with to a great degree.

3. Avoid transactional declines

Transactional declines are another payment-related problem that can drain on your revenue stream. Unlike chargebacks, it’s typically not fraudulent, but it’s still problematic. It often happens because the incorrect credit card number has been used, because the card is past its expiration date, or due to a frozen account.

Fortunately, the right high-risk merchant account payment gateway can be of help here too if it’s designed in a user-friendly way that helps customers identify the issue and work through it rather than abandon the intended purchase. This is a simple fix many payment processors fail to employ, even though it often leads to subsequent successful transactions.

4. Increase customer satisfaction

Unlike the previous three points that directly impact your eCommerce store’s bottom line, there are also other, more indirect reasons why eCommerce stores need high-risk merchant accounts. A prime example of that is customer satisfaction. The above problems don’t just put a dent on your revenue, they also often lead to customer dissatisfaction.

This, in turn, reduces customer retention, leads to negative reviews and word of mouth, and leads to various other problems down the line. A secure and user-friendly high-risk merchant account helps remedy this problem by fixing all the issues that lead to it.

5. Enhance your business’s growth

Similarly to #4, another long-term issue that stems from chargebacks, transactional declines, and fraud is the general stunting of your business’s growth. Even just a mild and momentary revenue reduction isn’t just an immediate problem that hits you in the pocket, it’s something that can drastically halt your business’s progress.

What’s more, a good high-risk merchant account can also enhance your business’s growth by being able to handle higher transaction volumes, by dealing with transaction spikes more smoothly, by having additional tools that facilitate things, such as seasonal discounts and promotions, and much more.

6. Improve your brand’s reputation

Fraud, chargebacks, and customer dissatisfaction can be a huge long-term issue not only for your business’s present and future growth, but for its overall brand reputation as well. A history of frequent chargebacks can drive potential partners away, for example, while even a single high-profile instance of an identity theft scam can completely tank your business’s reputation in the eyes of future potential customers.