Growth is crucial to the success of any business but it can also be very challenging to manage if the necessary protocols and software tools aren’t implemented properly.
Luckily, merchants that experience growth in the form of high-ticket sales and large volume transactions on a monthly basis can work with a reliable payment processor to set up a high-volume merchant account to better manage these payments.
What is a high-volume merchant account?
High-volume merchant accounts are merchant accounts tailored to support businesses with significant credit card transaction volumes that exceed monthly standards.
Merchants that have access to a high-volume merchant account have the ability to meet the demand of rapid expansion while simultaneously maintaining their day-to-day operations. This is due to these merchant accounts being designed to process high-volume transactions and large-ticket items without any complications.
Without a high-volume merchant account, businesses with high volume sales can be flagged for unusual activity, receive amount limits from their provider, or have their funds held.
High-volume merchant accounts can yield a wide variety of benefits for businesses that include:
- Improved growth efforts: Merchants that take advantage of high-volume merchant accounts can seamlessly accept a high volume of transactions and large amounts at a rapid pace, thus encouraging more growth and profits.
- Less interruption: High-volume merchant accounts eliminate any roadblocks that halt or hinder the transaction process, allowing businesses to accept and process payments without any interruptions.
- Enhanced payment security: Due to the nature of large purchases and high-volume tickets, merchants benefit from high-volume merchant accounts because they provide the necessary security software and protocols to mitigate fraud and other threats.
Despite the benefits of high-volume merchant accounts, there are also some drawbacks that can occur if these accounts aren’t properly managed.
Some disadvantages that can result from high-volume merchant accounts include:
- Greater risk of fraud: Due to the influx of transactions and handling of high-priced items, high-volume merchant accounts may be subject to more fraud. These threats and businesses in riskier industries can lead to accounts being labeled as high risk.
- Increased chargebacks: Similar to fraud, larger transaction volumes often result in an increase in chargebacks. Both legitimate and fraudulent chargebacks can lead to greater revenue losses for your business.
- Higher fees: Payment processors may charge higher fees for high-volume merchant accounts since they’re processing large numbers of transactions on a monthly basis.
- Delayed approval process: High-volume merchant accounts that substantially exceed monthly transaction volume limits may experience a delayed approval process for funds.
Before applying for a high-volume merchant account, businesses should thoroughly assess the benefits and disadvantages associated with these accounts.
What qualifies as high-volume processing?
Even if your business processes many transactions or high-value tickets, this doesn’t necessarily mean you’ll qualify for a high-volume merchant account.
To qualify as a high-volume business, you’ll need to process credit card payments that amount to a minimum of $100,000 in monthly sales.
If your business meets this requirement, you can apply for a high-volume merchant account by submitting an application — the same way you would apply for a standard processing account — and providing additional documentation which may include:
- Valid, government-issued ID (driver’s license or passport) for the account owner
- Social Security Number (SSN) or Employer Identification Number (EIN)
- Bank letter or printed voided check
- Articles of Incorporation or LLC
- Three months of most recent payment processing statements
- Three months of most recent business bank statements
- Secure, fully functioning website
- Proof of low chargeback ratios (below 2%)
The underwriting team will review your application, supportive documents, and your business as a whole, to see if it’s the right fit. The approval process for high-volume merchants usually takes 1-3 days, with the exception of high-risk companies which can range between 3-5 days.
What types of businesses need a high-volume merchant account?
In addition to companies that receive large quantities of monthly credit card transactions, there are specific businesses that may require a high-volume merchant account.
Some business models that may need high-volume merchant accounts include:
- Companies with recurring monthly or annual service fees
- Subscription-based companies that offer monthly products or services
- Property management companies that process monthly rental payments
- Companies with recurring monthly or annual membership fees
Other common industries in which businesses may require high-volume merchant accounts include vehicle sales, travel, high-end retailers, credit repair, debt collection, eCommerce, etc.
You may notice similarities in businesses and industries when it comes to high-volume merchant accounts and high-risk merchant accounts, they are not the same account models.