Part 1 of this article talked about what criteria determined whether or not a business fell in the high riskA merchant that is considered a high risk based upon the credit, product, method, ticket size or volume. Examples of high risk merchants are telemarketing, adult and travel related industries. category. Just as importantly, the criteria that determines what low-risk is needs to be addressed. In order to easily tell if a business is considered low-risk, some parameters are outlined below.
1. Card present transactions
If a merchant conducts more than 85% card present transactions, the business is considered low risk. However, if the business falls under any of the high risk parameters, the low risk label no longer applies. If a business swipes debit and credit cards, but has a high risk business type, business model, offers high risk products or services, or has a processing history that is considered risky, the merchant is no longer low risk.
2. Brick-and-mortar business
If a merchantA business that accepts credit cards for goods or services. has a physical storefront that customers can visit, the merchantA business that accepts credit cards for goods or services. is considered low risk. However, just like the above criteria, if the merchantA business that accepts credit cards for goods or services. falls under any high riskA merchant that is considered a high risk based upon the credit, product, method, ticket size or volume. Examples of high risk merchants are telemarketing, adult and travel related industries. parameter, the low risk label is null and voidThe reversal of an approved transaction, which has been authorized but not settled. Settled transactions require processing of a credit in order to be reversed. A void does not remove any hold on the customer’s open-to-buy..
3. Great processing history
If a merchantA business that accepts credit cards for goods or services. has a high credit score, low to non-existent return and chargebackThe act of reversing a sale made by the merchant. This can happen for many reasons including procedural and fraud. The process usually begins with a dispute from the cardholder. ratio, and low average ticketThe average amount of each sale made by a merchant. and annual volume, the merchantA business that accepts credit cards for goods or services. is considered low risk. However, just like the above criteria, if the merchantA business that accepts credit cards for goods or services. falls under any high riskA merchant that is considered a high risk based upon the credit, product, method, ticket size or volume. Examples of high risk merchants are telemarketing, adult and travel related industries. parameter, the business is no longer considered low risk.
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