Part 1 of this article talked about what criteria determined whether or not a business fell in the high risk 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 merchant has a physical storefront that customers can visit, the merchant is considered low risk. However, just like the above criteria, if the merchant falls under any high risk parameter, the low risk label is null and void.
3. Great processing history
If a merchant has a high credit score, low to non-existent return and chargeback ratio, and low average ticket and annual volume, the merchant is considered low risk. However, just like the above criteria, if the merchant falls under any high risk parameter, the business is no longer considered low risk.
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