Mid risk merchants may have characteristics of both high and low risk businesses. Factors such as time in business and industry can affect your company’s risk level as well.
What are Your Average Transaction Amounts?
Low risk businesses will have average ticket sales of around or less than $50 while high risk ones will have much higher ticket averages. These low ticket sales protect merchants from hefty chargebacks. Mid risk businesses may have an average of between $50 and $1,000.
What is Your Merchant History?
Businesses in their first few years of operating are high risk. Their future success is uncertain and banks are less likely to take their chances. Your mid risk business would have to be operating for at least a few years to build a credible history.
Some merchants can have poor credit or high chargeback ratios as part of their history. This immediately makes them high risk. A mid risk merchant will have few chargebacks.
What Additional Services Do You Offer?
Subscription services and Buy Now, Pay Later options are popular amongst online retailers. Both brick-and-mortar and eCommerce businesses are utilizing these alternative payment methods to boost sales.
Buy Now, Pay Later is a new payment method that allows consumers to pay for higher ticket items over time. These pricey payments can result in a high chargeback as they can for subscription services.
Recurring payments increases a business’s risk level. This convenient billing method can be dismissed by clients who may stop using a service and forget about their subscription. This can result in a high ticket chargeback.