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How To Determine The Balance Between Risk And Reward Risk and reward are two concepts that come up a lot throughout the business world. They play a role in everything from business mergers to project development and beyond. But they also have a major influence on merchant processing accounts. When you start opening an account for accepting credit cards, you'll need to understand that the balance between risk and reward is something that plays a significant role in the process. At National Processing, we want you to better understand how the balance between risk and reward is determined so you can better understand your entire account.

Essentially, the overall risks that a company poses to the processing firm will be determined through several different things, including overall reward. Here's a rundown of some basic things that you can use to help you figure out more about how it works: • Your risk factor will depend on your personal financial history, for starters. If you have bad credit, no credit, bankruptcy, and other similar issues, your risk level will increase. • It also moves up if your business has a history of defaulting on payments or of other similar financial issues like foreclosures or bankruptcies. • Merchant processors also look at the type of business you're operating. Certain businesses are considered to be high risk, such as companies that sell pharmaceuticals, online gambling sites, online auction sites, and others. These are also considered high-reward, however, since financial gains can be high. • On the 'reward' side, you'll want to remember that your processor will look at your overall monthly sales and the amount of sales that are made using a card terminal. The higher your sales, the more 'reward' there will be associated with the account. • The longer and more established your business is, the better its reward score will be as well. • Finally, risk is considered to be lower when you actually use a physical swiper during purchases since those purchases are less likely to involve fraud. It's important to find the right balance between risk and reward so you can get the best possible rates and terms from your merchant processing account. Keeping the above points in mind should help you strike the right balance and get the rates you deserve.

Posted in credit card processing, Merchant Account, Merchant Card Services on Apr 08, 2014