Entering into the tactical gear sector provides the potential for success and profits. However, it is not the same as marketing more conventional items.
It is important to understand why you will be designated as a high-risk business, and to choose the payment service provider that will best help you navigate the complexities of the weapons and tactical gear sector.
What is a high-risk business?
High-risk businesses occur in various industries. They are characterized by the perception that they carry the potential to pose additional danger of risk to the payment provider.
Payment service providers are in business to help you receive funds from your customers. The smoother and safer your transactions are, the happier your PSP will be.
Conversely, the more risk your operation carries, the warier it will become. In many cases, so-called conventional providers opt to refuse to do business with sellers that they deem to be high-risk.
High-risk businesses are those that, for whatever reason, represent an elevated level of probability to the lender that they will not get paid or that they will need to work harder to avoid negative consequences. Types of high-risk businesses include sellers of adult entertainment, pharmaceuticals, travel services, CBD products, gaming providers, and vendors of weapons such as firearms and knives.
Knife sellers and the high-risk designation.
Merchants selling knives are always deemed high-risk by payment service providers. This is because knives can be dangerous, chargeback levels are high, compliance with regulations can be arduous, and there is a higher-than-normal reputational risk.
As we said above, conventional PSPs want to work with companies with a medium to low chance of difficulties with product types or payments. That’s why it is essential that stores like yours partner exclusively with a high-risk merchant account provider with direct experience in your industry.
Like it or not, knives can be dangerous and are often used to commit crimes. Moreover, chargeback levels in this industry are higher, meaning that customers tend to dispute their knife purchases more often than the norm.
Furthermore, selling these products generally requires following additional federal and state regulations governing age verification, product safety standards, and shipping verification.
These can represent higher costs and result in the need for additional pricey scrutiny from the merchant provider. Finally, marketing these products can be controversial and lead to questions about the reputation of your business, which can damage relationships with investors and lenders.
Moreover, selling products online in general makes you vulnerable to an additional level of risk. Since you are not interacting with a customer face-to-face, you may not spot red flags as easily, nor can you visually inspect the credit or debit card they use to make a payment.
Choosing the right high-risk merchant account provider.
Not all high-risk providers are the same. Prioritize characteristics such as cost, transparency, payment choices, scalability, and customer service when selecting the one that is right for your knife business.
One thing to bear in mind is that your high-risk provider will charge you elevated per-transaction fees. You may endure more scrutiny during the application process, and be subject to additional requirements and costs throughout your relationship with the company.
However, you will benefit from the vendor’s expertise in your industry as well as their focus on security in this volatile sector.
It is crucial that you devote care and attention when choosing the right high-risk merchant account provider. To that end, choose several vendors, comparing and contrasting their offerings.
Focus on the one that provides fair prices, keeping in mind that the cheapest is not always the best. The company should also have the payment choices, responsive customer service, and scalability your business needs.
While you can expect to pay some higher costs, don’t break the bank to sign up with a provider. Every cost should be fair and clearly explained, and representatives should be available to thoroughly answer any questions that you might have.
If you are not happy with how you are treated in the “courtship” phase, chances are good that things will only get worse after you sign up. In other words, let the buyer beware.
Finally, focus on the all-important issues of security and compliance. Require that the vendor you choose adheres to the Payment Card Industry Data Security Standard (PCI DSS) and all other industry-specific regulations. Also, ensure that the company updates its systems regularly and has a positive reputation in the knife industry sector.
Are you ready to jump into the volatile but potentially lucrative knife sales marketplace? Partner with the right high-risk merchant account provider and your business can remain on the cutting edge while raking in handsome profits.
