Credit Card Processing Options For High Risk Merchants
The ability to accept credit cards as a method of payment is not always an option for all merchants. Certain businesses are considered high risk and as such find it difficult to qualify for a merchant account or card processing services. Merchants in industries considered high risk must either consider other payment options or pay a much higher price for the privilege of accepting credit cards.
High Risk Merchants
There are several factors which may deem a business “high risk” in the world of credit card processing. In some situations it may simply be the credit history of the business owner, however in most cases it is the type of industry or business in which the company operates. Online merchants or e-commerce businesses are considered high risk as well as any adult businesses or travel businesses. One specific industry targeted by processors as high risk is the medicinal marijuana industry- which is legal in 16 states as well as the District of Columbia. These merchants have had their card processing rights reduced or eliminated to the point where accepting cards for payment is difficult if not impossible.
Medical Marijuana Dispensers
Merchants legally allowed to disperse marijuana for medicinal purposes often struggle to operate their business despite being legally permitted to do so in certain states. Finding bankers and conducting normal business transactions may be hindered by laws designed to stop the illegal sale of marijuana. These merchants may find themselves unable to open and maintain banking accounts that would otherwise be available to other merchants. While there are several actions taking place to try to even the playing field for participants in the medicinal marijuana industry, such as new bills being proposed to help these businesses with tax issues and other problems associated with the industry, credit card processing continues to be an issue.
Services Terminated For Distributors
In early July, many medicinal marijuana distributors will find themselves out in the cold when it comes to accepting credit card payments. The reason this industry has so many issues is due to the fact that despite being legal in certain states, the federal government does not recognize the medicinal marijuana industry as a legal industry. Considered illegal by the federal government means other businesses such as banks and credit card processors may be punished for “doing business” with a medical marijuana distributor or participant.
Options For This High Risk Industry
As with many other high risk industries, those in the medicinal marijuana industry may be forced to look toward non-traditional options to facilitate business transactions. In this situation, looking for a processor who works specifically within one industry may be helpful to ensure services are always available. An experienced payment processor who is not only willing but able to work with a high risk merchant is often the only option available to ensure credit card processing is an option. By looking to trade groups and other national organizations, those in this high risk industry can find a processor willing to provide services at an affordable cost.